Systems Analysis and Design by Elias M Awad [PDF]

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Systems Analysis and Design



y



^ fv-



Contents



Part



One



Overview 1.



Systems Concepts and the Information Systems Environment 4 Introduction. The Systems Concept: Definition. Characteristics of a System: Organization. Interaction. Interdependence. Integration. Cen-



Elements of a System: Outputs and Inputs. Processor(s). and Interface. Types of Systems: Physical or Abstract Systems. Open or Closed Systems. ManMade Information Systems. Illustration A Dynamic Personnel Information System Model. tral Objective.



Control. Feedback. Environment. Boundaries



—



2.



The System Development



— What



38



Life Cycle



Recognition of Need the Problem? Feasibility Study. Analysis. Design. Imple-



Introduction. Is



The System Development



Life Cycle:



mentation. Post- Implementation and Maintenance. Considerations for



Candidate Systems: Political Considerations. Planning and Control for System Success. Prototyping. 3.



The Role



of the Systems Analyst



60



Introduction. Definition. Historical Perspective: The Early Years. The



War



Effort.



What Does



Personal Qjualifications.



Take to Do Systems Analysis? Academic and The Multifaceted Role of the Analyst: Change



It



XI



Xll



CONTENTS



Agent. Investigator and Monitor. Architect. Psychologist. Salesperson.



The Analyst /User Interface: Behavioral Issues. The Place of the Analyst in the MIS Organization:



Motivator. Politician. Conflict Resolution.



The MIS Organization. Rising Positions in System Development: The Paraprofessional. The Technical Writer. Conclusions.



Part



Two



Systems Analysis 4.



90



Systems Planning and the



Initial Investigation



92



Introduction. Bases for Planning in Systems Analysis: Dimensions of Planning. Initial Investigation: Needs Identification. Determining the User's Information Requirements. Case Scenario. Problem Definition



and Project



Background Analysis. Fact-finding. Fact Analysis.



Initiation.



Determination of Feasibility. 5.



Information Gathering 126 Introduction. What Kinds of Information Do We Need? Information about the Firm. Information about User Staff. Information about Work Flow. Where Does Information Originate? Information-Gathering Tools: Review of Literature, Procedures, and Forms. On-Site Obsen'ation. Interviews and Qjuestionnaires. Types of Interviews and Qfjestionnaires.



6.



The Tools



164



of Structured Analysis



Introduction.



What



Is



Stiiictured Analysis?



The Tools



of Structured



The Data Flow Diagram (DFDI. Data Dictionarv. Decision Tree and Structured English. Decision Tables. Pros and Cons of Each Tool.



Analysis:



7.



196



Feasibility Study straints.



System



Performance Definition: Statement of ConIdentification of Specific System Objectives. Description of



Introduction.



Outputs. Feasibility Study: Feasibility Considerations. Steps in Feasibility Analysis. Feasibility



8.



Report. Oral Presentation.



Cost/Benefit Analysis 232 Introduction. Data Analysis. Cost/Benefit Analysis: Cost and Benefit Categories. Procedure for Cost/Benefit Determination. The System Proposal



Part Three



Systems Design 9.



The Process and Stages



258 of Systems Design



Introduction. The Process of Design: Logical



260



and Physical Design. De-



CONTENTS



—



Form- Driven Methodology' Structured Walkthrough. Major Dexelopment Activi-



sign Methodologies: Structured Design.



The IPO



Charts.



Personnel Allocation. Audit Considerations: Processing Controls and Data Validation. Audit Trail and Documentation Control. ties:



10.



InputOutput and Forms Design



284



Introduction. Input Design: Input Data. Input Media



and Devices. Out-



put Design. Forms Design: What Is a Form? Classification of Forms. Requirements of Forms Design. Carbon Paper as a Form Copier. Types of Forms. Layout Considerations. Forms Control. 11.



File Organization



320



and Data Base Design



Introduction. File Structure. File Organization: Sequential Organization.



Inde\ed-Sequential Organization. Inverted List Organization. Di-



rect-Access Organization. Data Base Design: Objectives of Data Base. Key Terms. Logical and Physical Views of Data. Data Structure. Normalization.



The Role



of the Data Base Administrator.



Part Four



System Implementation 12.



356



System Testing and Quality Assurance 358 Introduction. V\'hv Sx'stem Testing? What Do We Test for? The Nature of Test Data. The Test Plan: Activity Network for System Testing. Svstem Testing. Qualit\' Assurance: Quality Assurance Goals in the Svstenis of Quality Assurance. Trends in Testing. Role of the Data Processing Auditor: The Audit Trail.



Life Cycle. Levels



13.



Implementation and Softivare Maintenance 386 Introduction. Conversion: Activitv Network for Conversion. Comhating Resistance to Change. Post-Implementation Re\ie\v: Request for Review. A Review Plan. Software Maintenance: Maintenance or Enhance-



ment? Primary Activities of a Maintenance Procedure. Reducing Maintenance Costs. 14.



Hardware/Software Selection and the Computer Contract 414 Introduction. The Computer Industiy: Hardware Suppliers. Software Suppliers. Ser\ice Suppliers. The Software Industiy: Tyjjes of Software. A Procedure for Hardware/Software Selection: Major Phases in Selection. Software Selection. The Evaluation Process. Financial Considerations in Selection: The Rental Option. The Lease Option. The Purchase Option. The Used Computer. The Computer Contract: The Art of Negotiation. Contract Checklist.



15.



Project Scheduling and Software Introduction. Why Do Systems Fail? What



444 Is



Project



Management? A



XIU



XI\'



CONTENTS



16.



Security, Disaster/Recovery, in



and Ethics



System Development



473



Introduction. System Securitv': Definitions. Threats to System Security. Control Measures. Disaster/ Recoverv Planning: The Plan. Ethics in



System Dexelopment: Ethics Codes and Standards of Beha\ior.



Glossary of Terms



502



Index



516



Systems Analysis and Design



Part



One



Overview



^r:



•



1 SYSTEMS CONCEPTS AND THE INFORMATION SYSTEMS ENVIRONMENT



2



THE SYSTEM DEVELOPMENT



3



THE ROLE OF THE SYSTEMS ANALYST



LIFE



CYCLE



Chapter



1



Systems Concepts and the Information Systems Environment



Introduction



The Systems Concept DEFINITION Characteristics of a System



ORGANIZATION INTERACTION



INTERDEPENDENCE INTEGRATION



CENTRAL OBJECTIVE Elements of a System OUTPUTS



AND



PROCESSOR(S)



CONTROL FEEDBACK



INPUTS



At a Glance Systems analysis is the application of the systems approach to problem solving using computers. The ingredients are systems elements, processes, and technology. This means that to do systems work, one needs to understand the systems concept and how organizations operate as a system, and then design appropriate computer-based systems that will meet an organization's requirements. It is actually a customized approach to the use of the computer for



problem



solving.



By the end of this chapter, you should know: 1. The primary characteristics of a system and the importance of the systems concept for developing information systems. 2. How the various elements of a system work together to intertace with the



end 3.



4. 5. 6.



user.



How



physical systems differ from abstract systems. The unique features of formal and informal information systems. The makeup of management information systems. How decision support systems help in decision making.



ENVIRONMENT BOUNDARIES AND INTERFACE Types of Systems PHYSICAL OR ABSTRACT SYSTEMS Systems Models Schematic Models Flow System Models Static System Models Dynamic System Models



OPEN OR CLOSED SYSTEMS



MAN-MADE INFORMATION SYSTEMS Formal Information Systems Categories of Information



Intormal Information Systems Computer-Based Intormation Systems



Management



Information Systems (MIS) Decision Support Systems (DSS)



Illustration— A



Dynamic Personnel Information System Model



PAKT ONE OVERVIEW



INTRODUCTION It



s



a Upical da\



that



it



reall\'



.



The car



starts



OK, but you think with a flash of



irritation



shouldn't take that long to get the air conditioner going. Onl\'



an hour to catch the plane, and cars are piled up on the express\va\' as far as the e\e can see. Vou begin to wonder if there isn't a way to allow airport traffic to mo\ 8 faster. Vou get to the parking lot and have to walk half a mile to the plane.



obstacles?



Each one



Where



— the is



is



the shuttle?



\\'h\'



ticket counter, the X-ray



a system in



itself, \'et



so long a wait? \\h\ so



mam



machine, the gate attendant,



they are



all



etc.



part of the transportation



s\'stem.



about sxstems anaksis and how it relates to shaping organizations, impro\1ng performance, and achie\ing objectives for profitabilir\ and growth. As our scenario suggests, the emphasis is on systems in action, the relationships among subsystems, and their contribution to meeting a common goal in this case, fixing passengers to destinations on time. Looking at a s\stem and determining how adequateh- it fimctions, the changes to be made, and the cjualitx of the output are parts of s\'stems This book



is



—



anal\sis.



Systems analysis as used in this text is the application of the systems approach to the stud\' and solution of problems using computer-based systems. Sx'stems thinking is integral to systems work. Organizations ai^ complex systems that consist of interrelated and interlocking subsystems. Changes in one part of the s\stem ha\e both anticipated and unanticipated consequences in other parts of the s\'stem. The s\'stems approach is a wa\of thinking about the anal\sis and design of computer-based applications. It pro\ides a frameworic for \isualLzing the organizational and en\ironmental factors that operate on a system. When a computer is introduced into an organization, xarious functions and dysfunctions operate on the user as well as the organization. Among the positixe consequences are improxed performance and a feeling of achiexement with qualitx infomiation. .Among the unanticipated consequences might be (1 a possible threat to employees that their xvork no longer "measures up, I2i decreased morale of personnel who were not consulted about the installation, and I3i feeling of intimidation by users xvho haxe limited training in the nexv computer. In assessing these consequences, the analyst's role of allexiating fears and remoxing 1



'



barriers for the user



is



extremelx' crucial for the sxstem's success.



Systems analx'sis and design focus on sxstems, processes, and technologx'. Haxing a firm grasp of the makeup of the system in question is a prei'equisite for selecting the procedure or intixjducing the computer for implementation. In our airport scenario, knoxxledge of the traffic fiow, the strategic location of the airport, and hox\' a gixen change will speed up airport traffic is important in deciding on improxements such as special shuttles, helicopter senice. or



more



aiq^ort limousines to solxe the prob-



lem. Thus, a background in sxste?his concepts and a familiarity xxith the ways organizations function are helpful. This chapter discusses the systems



>\



^' PC.. -i--,



»



.



1 /



SYSTEMS CONCEPTS



AND THE INFORMATION SYSTEMS ENVIRONMENT



concept, elaborates on the types of systems that are relevant to systems analysis, and illustrates the relationship between the knowledge of systems



concepts and systems antdysis.



THE SYSTEMS CONCEPT Scholars in various disciplines



who



are concerned about the tendency



toward the fragmentation of knowledge and the increasing complexity of phenomena have sought a unifying approach to knowledge. Ludwig von Bertalanffy, a biologist, developed a general systems theoiy that applies to any arrangement of elements such as cells, people, societies, or even planNorbert Wiener, a mathematician, obseived that information and communications provide connecting links for unifying fragments or elements.^



ets.'



which shows the parallel between the functioning of human beings and electronic systems, laid the foundation for today's computer systems. Herbert A. Simon, a political His systems concept of information theory,



scientist, related the systems concept to the study of organizations by viewdng an ongoing system as a processor of information for making deci-



sions.'



Systems analysis and design for information systems were founded in general systems theory, which emphasizes a close look at all parts of a



component and overlook



system. Too often analysts focus on only one



other equally important components. General systems theory is concerned with 'developing a systematic, theoretical framework upon which to make decisions. "^ It discourages thinking in a vacuum and encourages considera-



and its extei-nal environment.'' Pioneering work in general systems theoiy emphasized that organizations be viewed as total systems. The idea of systems has become most practical and necessary in conceptualizing the interrelationships and integration of tion of



all



the activities of the organization



operations, especially



when



thinking about organizations



using computers. Thus, a system



and



their problems.



It



is



a



way



of



also involves a set of



techniques that helps in solving problems.



Definition



The term system



is



derived from the Greek



organized I'elationship



'



'



Row,



Ludwig



among



Bertalanffy, General



Systems Theory (New York; George



Norbert Wiener, Cybernetics (New York: John Wiley



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A 1



kept randomly in boxes with onl\' the date of their creation [printed on the outside. Pavment slips are filed in boxes and indexed by date only. The actual checks are mailed to the bank for Dix)cessing (see Exhibit 4-1 1.



4



EXHIBIT 4-1



/



SYSTEMS PLANNING



AND THE



INITIAL INVESTIGATION



Present Information Flow at Jefferson Credit Center



Source documents



Payments



Customer inquiries



Encoding



Encodement reading



computer entry



119



120



PAKT



TWO / SYSTEMS ANALYSTS



Customer



inquiries are received through the



imately 660 per



mailroom



at



approx-



week and by phone at 150 per week. Mail inquiries are and indexed by month and by account number within



filed in a cabinet



each month. Further correspondence related to a particular inquiry is also stored with the original document. When an inquiry is received, it necessitates the retrieval of inquiry correspondence. The employee must know the approximate date when the document was received and the account number. In many cases, the date is difficult to determine, which necessitates a search through several months of documents. With a physical file system, there is a good chance of misfiling documents; this complicates the search. To retrieve payment slips, the employee invariably searches the paper file, although they are also stored on microfilm. This is due to the lack of a reasonable index system,



which makes microfilm



retrieval



almost as slow as the paper file. Consequently, search time averages 10 minutes. Often it takes half a day. Cleariy, the Jefferson credit center uses state-of-the-art computer hardware IBM interactive system but inefficient manual document-



—



—



retrieval operations.



Assignment a.



What



is



the main problem facing Jefferson stores and the credit center? Be



specific. b.



In



doing an



initial investigation,



what goals and considerations would you



focus on? c.



Provide the necessary information to detennine the feasibility of an alternative system.



An in-house



Is



an



alternative



system feasible?



analyst of a lai^e commercial



Justify



your answer.



bank received an inquiry



(see



the box) from Mrs. Mattes, the second \ice president of operations, concerning Christmas Club coupons. After a brief talk with her, the analyst decided to see for himself



how



the whole operation works.



He



observed the following: a.



are classified as $1.00, $2.00, $5.00, and $10.00. For example, a club member with 52 $1.00 coupons saves $1.00 per week or



Coupons



$52 by Christmas. b.



A customer comes



in with the



coupon book



for deposit.



The



teller



stamps the stub (in the coupon book) with the date of pavTiient and the amount, and returns the coupon book to the customer.



receives the cash, detacheg the coupon,



4



c.



/



SYSTEMS PLANNING



AND THE INmAL



INVESTIGATION



end of the day, the coupons are sorted by denomination, counted, and the total value bcdanced against the cash received. The entire process takes one person about three hours. At the



determined the problem to be too many categories of coupons rather than a shortage of clerical help. Increases in people's incomes, interest-bearing checking accounts, and the like would make it unprofitable for the bank to maintain the $1.00, $2.00, and $5.00 coupon books. Therefore, they should be discontinued. Effective January of next year, club members should be sold $5.00 or $10.00 coupon books or encouraged to open a savings After observing the operation, the analyst



account.



PROBLEM REPORT FORM



16-A



Statement of Problem



Because of the increase in the number of Christmas Club accounts, has become necessary to seek full-timie clerical help to process the daily coupons. Furthermore, the manual handling of each coupon has made it more costly to maintain the club. it



Reason(s) for Reporting Problem



The manucd handling



coupons rricikes it difficult to attract regular help. Tellers complain that coupons interrupt their work. Immediate solution to this problem can improve the service and provide



efficient



NAME:



of



operation of the club.



Dixie Mattes



DEPARTMENT:



TITLE: Second vice president



Operations



EXT: 5421



DATE:



3/15/85



Assignment a.



b.



Do you agree with the analyst's definition of the problem? you define it? Why? Explain. If



you were



to



do the



initial



investigation,



If



not,



how would you



how would handle



it?



Elaborate.



/Mlied Concrete, Inc., has



had



to



revamp



its



approach



to maintaining a



computer system and converting applications. Recently management has established a steering committee to oversee and approve all applications before they are run on the mainframe. The committee con-



121



122



PAKT



TWO SYSTEMS ANALYSTS /



one member from each of the following areas: accounting, sales, production, and information systems. The committee is chaired by the



sists of



The primary charge is to review each user request and approve or disapprove it based on feasibility and



vice president in charge of production.



approved, the user department is billed for its development by a debit transaction against its budget. The amount includes computer time, analyst and programmer time, and supplies. All department heads have agreed to the new policy. In formalizing the committee's authority and responsibilities, serious questions wei'e raised by several user depar'tments about whether the committee has the authority to turn doun a project even if it is technically feasible. They argued that since they are paying for the project out of their budget, there is no reason for it to be rejected. priority. If a request is



Assignment Should all user projects that are operationally and technically feasible be developed as long as the user is paying the price? If so, what should be the role of the steering committee?



a.



What do you



b.



think of the



makeup



should the analyst, programmer, committee? Elaborate.



of the steering committee?



What



role



or data base specialist play in a steering



The steering committee for the information system of a large savings and loan bank is evaluating a request from the mortgage loan department to provide an online system in all branches. The bank's mainfi'ame is



operating



at



55 percent of capacity.



new application. The



It



has adequate



only equipment needed



memory to handle



an online temiinal in each of the bank's 27 branches and a software package that can be installed in five weeks using the existing telecommunications network. the



The terminals



is



are available thi-ough the vendor' within the



week



at



$2,100 each. Branch tellers could be well trained in less than four



working days. The softwai-e package costs $18,000. The existing mortgage loan applications are handled in a l)atch mode. At the end of the day, each branch sends the mortgage payments



and documents to the computer center, located 18 miles away. When the documents ai-e received, data entry operatoi-s enter each pavment and account number directly on disk. V\'hen all transactions are entered, they are processed. All accounts are updated and the resulting report (1,400 pages long) is^sent to various branches for reference.



Obviously, in a batch environment,



previous day's



activities.



all



infonnation



is



based on the



4



The bank



is



/



SYSTEMS PLANNING



AND THE



ZNITIAL INVESTIGATION



new laborsaving when a new applica-



a leader in the industiy for introducing



and income-generating applications. In the past, tion was implemented, it set the tone for other banks to duplicate. The systems group is highly motivated and well paid and works closely with management on a regular basis. mortgage loans reasons that with an online mortgage loan system, tellers can answer inquiries about mortgage payments, balances, and other mattere in just seconds. Within the year, she expects customers to call the branch rather than In the proposal, the vice pi^sident of



main office for all infomiation regarding their respective loans. This means a sa\ings in human resources and a more efficient distribution of the work load among the branches. the



Assignment Based on the information pro\ided,



a.



Why?



pui-sued?



this



is



proposal feasible? Should



it



be



Ekiborate.



What other information does the steering committee need to do a thorough investigation? What source(s) would it come ftxjm? Be specific.



b.



Selected References Bariff,



M. L. "Information Requirements Analysis: A Methodological Rexiew." WorkPaper 76-08-02, the Wharton School, University of Pennsylvania, Phila-



ing



delphia, 1976.



Bowman,



Brent;



Gordon



Davis;



and James



C.



Wetherbe. "Modeling for MIS."



Datamation, July 1981, pp. 155-64. Information Systems Planning Guide. Application Man-



Business Systems Planning ual,



GE



20-0527-3,



—



3d ed. IBM Coip, July 1981. Available thraugh IBM branch



offices.



Caldwell, Jack. "The Misunderstanding of Objectives." Journal of Systems Manage-



ment. June 1982, Cerullo, Michael



J.



p. 30.



"MIS:



What Can Go Wrong? Management Accounting, '



April 1979,



pp. 43-49.



Cooper, Roldolpb B., and E. Burton Swanson. "Management Information Requirements Assessment: The State of the Art." Data Base, Fall 1979, pp. 5-16. Couger, J. D. "Comparative Analysis of Infomiation Systems Curricula." Computing Newsletter for Schools of Business, vol. XVII, no. 2 (October 1983), p. 1. Davis, Gordon B. "Strategies for Information Requirements Determination." IBM



Systems Journal 21, no. 1 11982), pp. 4-30. Doll, \Vm. J., and Mesbab U. Ahmed, "Managing User Expectations." Journal of Systems Management, June 1983, pp. 6-11. Gore, Marvin, and John Stubbe. Elements of Systems Analysis. 3d ed. Dubuque, Iowa: Wm. C. Brown, 1983, pp. 178-207. Haughey, Thomas P., and Robert M. RoUason. "Function Analysis: Refining Information Engineering." Computenvorld lln-Depth), August 22, 1983, pp. 24-26flF.



123



124



PART



TWO SYSTEMS ANALYSTS /



The Delphi Method." In Technological ForeGovernment: casting for Industry and Methods and Applications ed. James R.



Helmer,



Olaf. "Analysis of the Future:



Bright.



Englewood



Cliffs, N.J.:



Prentice-Hall, 1968, pp. 116-22.



Lederer, Albert T. "Information Requirements Analysis." Journal of Systems Management, December 1981, pp. 15-19. Leif,



Robert



Robert D. Dodge; and Ralph



E.;



Management



Strategy to



Style."



L. Ogden. "Adapting Data Pixjcessing Computerworld (In-Depth), December 5, 1983,



pp. 25-32.



and Myles Chen. "Long Range Planning for



Lientz, Rennet P.,



InfoiTnation Services."



Long Range Planning, vol. 13 (February 1980), pp. 55-61. Linstone, M. A., and M. Turoff, eds. The Delphi Method: Techniques



and Applica-



tions. Reading, Mass.: Addison-Wesley Publishing, 1975. McFarlan, Warren. "Portfolio Approach to Information Systems." Journa/ of Systems Management, January 1982, pp. 11-19. McLean, Ephraim R., and John V. Soden. Strategic Planning for MIS. New York: John



WUey Miller,



&,



Wm.



Sons, 1977. B.



"Developing a Long Range



EDP



Plan." Journal of Systems



Manage-



ment, July 1979, pp. 36-39. Gil. "Problem Definition: Tasks and Techniques." Journal of Systems Management, June 1983, pp. 16-21. Munro, Malcolm C. "DeteiTnining the Manager's Information Needs." Journal of



Mosard,



Systems Management, June 1978, pp. 34-39. Human Problem Solving. Englewood



Newell, A., and H. A. Simon.



Cliffs, N.J.:



Pren-



tice-Hall, 1972.



Nolan, Richard



L.



"Managing Infomiation Systems by Committee." Harvard Business '



Review, July-August 1982, pp. 72-79. Pitagorsky, George. "Analyzing, Defining Systems Needs."



Systems Week, August



Management Information



24, 1983, p. 30.



Poppel, Harvey. Strategic Impact of Information Technology.



New York: Deltak Corp.,



1982, pp. 5-9.



Powers, Michael; David Adams; and Harlan D. Developnient: Analysis



&



Mills.



Computer Information System



Design. Cincinnati: South-Western Publishing, 1984,



pp. 60-82.



Scharer, Laura. "Pinpointing Requirements." Datamation, April 1981, pp. 139-40. Steiner, George A. "Formal Sti'ategic Planning in the United States Today." Long



Range Planning 16, no. 3 (1983), pp. 13-17. Tharp, Marvin O., and Wm. Taggart. "Management Information Analysis: A



Situa-



Management Datamatics 5, no. 6, (1976), pp. 231-39. Thierauf, Robert J., and George W. Reynolds. Effective Information Systems Managetion Perepective."



ment. Columbus, Ohio: Charles



E. Merrill Publishing, 1982.



Wetherbe, James C. Systems Analysis and Design: Traditional, Structured, and Advanced Concepts and Techniques. Minneapolis, Minn.: West Publishing, 1984, pp. 319-59.



I



(^



Chapter 5 Information Gathering



Introduction



What Kinds



of Information



Do We Need?



INFORMATION ABOUT THE FIRM INFORMATION ABOUT USER STAFF INFORMATION ABOUT WORK FLOW



Where Does Information Originate? Information-Gathering Tools



REVIEW OF LITERATURE, PROCEDURES, ON-SITE OBSERVATION



INTERVIEWS



AND QUESTIONNAIRES



Interviews



The Art



1^



of Interviewing



AND FORMS



.



At a Glance



A



key part of feasibility analysis is gathering information about the present The analyst must know what information to gather, where to find it, how to collect it. and what to make of it. The proper use of tools for gathering information is the key to successful analysis. The tools are the traditional interview, questionnaire, and on-site observation. We need to know, for example, how to structure an interview, what makes up a questionnaire, and what to look for in on-site observations. These tools, when learned, help analysts assess the effectiveness of the present system and provide the groundwork for recommending a candidate system. system.



By the end 1



of this chapter,



What categories



you should know:



of information



are available



4.



The sources of information. How to arrange an interview. The types of interviews and questionnaires.



5.



How to



2.



3.



construct



a



questionnaire.



Arranging the Interview Guides to a Successful Interview Questionnaires



TYPES OF INTERVIEWS AND QUESTIONNAIRES The Unstructured Alternative The Structured Alternative Procedure for Questionnaire Construction Reliability of Data from Respondents The Reliability-Validity Issue



for



systems analysis.



128



PART



TWO SYSTEMS ANALYSTS /



INTRODUCTION Chapters 5 and 7 describe the early phase of system development. Whether the thrust of the activities



is



the



initial



investigation or a feasibilitv' study, the



aim is primarily to develop an understanding of the problem facing the user and the nature of the operation. Understanding how each activitv operates requires access to information.



Information gathering is an art and a science. The approach and manner in which information is gathered require persons vvdth sensitivity, common sense, and a knowledge of what and when to gather and what



channels to use in securing information. Additionally, the methodologv' and tools for information gathering require training and experience that the analyst is expected to ha\e. This means that information gathering is neither easy nor routine. Much preparation, experience, and training are required.



This chapter addresses the categories and sources of information and the functions, uses, and relevance of key infoiTnation-gathering tools during the phases of system analysis. The phases are: Familiarity v\ith the present system through available documentation,



such as procedures manuals, documents and the user



staff,



and



their flow, interviews of



on-site observation.



making associated v\ith managing the system. This is important for determining what information is required of the system. Conducting interviews clarifies the decision points and how Definition of the decision



decisions are



made



in the user area.



Once decision points



3.



are identified, a series of interviews



may be



conducted to define the information requirements of the user. The information gathered is analyzed and documented. Discrepancies between the decision system and the information generated from the information system are identified. This concludes the analysis and sets the stage for system design.^



WHAT KINDS OF INFORMATION DO WE NEED? Before one determines where to go for information or what tools to use, the first



requirement



information



user



staff,



is



to figure out



we need



what information



to gather.



Much



of the



to analyze relates to the organization in general, the



and the work flow



(see Figure 5-1).



For details on the application of s\stem analysis activities, refer to James VVetherbe, Systems Analysis and Design: Tradilional. S&vctured, and Advanced Concepts and Techniques '



(St.



Paul, Minn.;



West Publishing,



1984), pp. 127-54.



•



5



FIGURE 5-1



• Polirjps



nnals



•



Organization



INFORMATION GATHERING



Categories of Information Information Describing



Kind of Information



•



/



^«.^ '•-^



The organization



structure



Authority relationships • Job functions • Information •



requirements •



Interpersonal relationships



•



Wnrk



"^-..^^^^^ ^*''~~'"^-~



^^^—"^



User



to



staff



Information gathering



finw



The work ^^__,,,,—-—



procedures •



Work schedules



-'



itself



'



Information about the Firm Information about the organization's policies, goals, objectives, and structure explains the kind of envdronment that promotes (or hinders) the intro-



duction of computer-based systems. Company policies are guidelines that determine the conduct of business. Policies are translated into lules and procedures for achieving goals. A statement of goals describes management's commitment to objectives and the direction system development vvoll follow. Objectives are milestones of accomplishments toward achieving goals. Information from employee manuals, orientation pamphlets, annual company reports, and the like helps an analyst form opinions about the goals of the organization. After policies



and goals



are set, a firm



is



organized to meet these goals.



The organization structure, via the organization chart, indicates management directions and orientation (see Figure 5-2). For example, a familyowned firm often has a rigid, centralized structure and a conservative approach to implementing change. This suggests that when it comes to computerizing applications, the analyst has a challenge to before a final approval It



is



sell



the project



secured.



The organization chart represents an achievement-oriented structure. helps us understand the general climate in which candidate systems utII



be considered. In gathering information about the firm, the analyst should watch for the correspondence between what the organization claims to achieve (goals) and actual operations. Policies, goals, objectives, and struc-



129



President



Installment



Officer



Installment



Loan bauni



Loans



Loan vice



ent



Presid



—



Senior



cer



5> io



President



President



Assistant Commercial



Vice



KIdd Loans



Vice



L.



Supervisor



Proof



'



Hookkeopint)



c 3 O



1



Ol 2i



~\



I



Li-



II



E X President



Platform



Second



II aO



Vice



=



"I



Q.



coo



moo



c e



5



c



Q.



1



Ol 5



a:



^ C



E



Do ^



(ft



Supervisor



5



/



INFORMATION GATHERING



ture are important elements for analysis. Requests for



must be evaluated



computer



ser\ice



in the light of these elements.



Information about User Staff Another kind of information for analysis is knowledge about the people who run the present system their job functions and information requirements,



—



the relationships of their jobs to the existing system,



network that holds the user group together.



We



and the



interpei'sonal



are actually focusing



on



people's roles, authority relationships, job status and functions, information



requirements, and interpersonal relationships. Information of this kind highlights the organization chart and establishes a basis for determining the



importance of the existing system for the organization. In summaiy, the major focus is to find out what people the analyst is going to be dealing with and what each person expects to get out of a candidate system before it goes thixjugh design and final implementation. Once such information is secured, the next step is to show how various jobs hang together within work schedules and procedures.



Information about Work Flow Work flow focuses on what happens to the data through various points in a system. This can be shown by a data flow diagram or a system flowchart. A data flow diagram represents the information generated at each processing point in the system and the direction



it



takes from source to destination



system flowchart describes the physical system The information available ft-om such charts explains the procedures used for performing tasks and work schedules. Details on charts are covered in Chapter 6. (see Figure 5-3). In contrast, a (see Figure 5-4).



WHERE DOES INFORMATION ORIGINATE? is gathered from two principal sources: personnel or written documents ftom within the organization and from the organization's environment. The primary e^iternal sources are:



Information



1.



Vendors.



2.



Government documents.



3.



Newspapers and



The primary



professioncil journals.



internal sources are:



1.



Financial reports.



2.



Personnel



3.



Professional staff (legal counsel, ditor, etc.).



staff.



EDP



[electronic data processing] au-



131



132



PAST



FIGURE 5-3



TWO SYSTEMS ANALYSTS /



Data Flow Diagram



of



a



Payroll System



•A



4.



System documentation or manuals.



5.



The user or user



6.



Reports and transaction documents.



staff.



Hardware xendors are traditional sources of information about systems and software. Other equipment manufacturers proxide information about competitive sxstems. A third source that has experienced tremendous growth during the past decade is the software house. There are thousands of software packages on the market to suit \irtually everv' problem area with reasonable modifications. Independent listings of software packages and their vendors are available through associations such as Computerworld and DATAPRO, or other organizations with experience in the application under consideration. Other external sources of information are government documents, technical newspapers, and professional journals. Computerworld, for example, provides weekly information about new hardware, hardware installations, software developments, and trends in the field. Articles are also published in system development, documentation, and EDP journals, such as Communications of the ACM and Journal for System Management. They provide invaluable updates in the systemaarea. Internal sources of infomiation



ai'e



limited to the user



staff,



company



personnel, and various reports. User personnel are the fixjnt-line contacts



5



FIGURE 5-4



INFORMATION GATHERING



System Flowchart of a Payroll System



Verify



time cards



/



_^



/



Dat entry Data



Data entry



\



CRT



program



/



I Payroll trans-



actions



©



program



Checks



Reports



Payroll



_^f New



\



Year-end



program



and validating information about a system. An important source of information is the key employee who has been in the user area for years and is familiar with present activities and applications. As we shall see later, historical and sensitive information is often acquired from informants. In some cases, that is the only source available to the analyst. for acquiring



INFORMATION-GATHERING TOOLS No two



projects are ever the same. This



means



that the analyst



must decide



on the information gathering tool and how it must be used. Although there are no standard rules for specifying their use, an important rule is that information must be acquired accurately, methodically, under the right conditions, and with minimum interruption to user personnel. For example,



if



the analyst needs only information available in existing manuals, then



133



134



PART



TWO SYSTEMS ANALYSTS /



unnecessary except where the manual is not up to date. If additional information is needed, on-site observation or a questionnaire may be considered. Therefore, we need to be familiar with various infoiTnation-gathering tools. Each tool has a special function, depending on the information needed. The tools discussed in this chapter are shown in interviewing



is



Figure 5-5.



Review of Literature, Procedures, and Forms Very few system problems are unique. The increasing number of software packages suggests that pixjblem solutions are becoming standardized. Therefore, as a first step, a search of the literature through professional references and procedures manuals, textbooks, company studies, government publications, or consultant studies may prove invaluable. The primary drawback of this search is time. Often it is difficult to get certain reports, publications may be expensive, and the information may be outdated due to a time lag in publication. Procedures manuals and forms are useful sources for the analyst. They describe the format and functions of the present system. Included in most manuals ai'e system requirements that help determine how well various objectives are met. Up-to-date manuals save hours of information-gathering time. Unfortunately, in



many



cases,



manuals do not



exist or are seriously



out of date.



FIGURE 5-5



Information-Gathering Methods """"^^^



Review ture,



litera-



procedures,



and forms



On-site observation



Informationgathering



* Data



Interviews



organization



tools



-



Questionnaires



^



5



/



INFORMATION GATHERING



Included in the study of pixjcedures and manuals is a close look at used for capturing and proxading information. Figure 5-6 illustrates the flow of a purchase oixier in a production system. The objecti\'e is to understand how forms are used. The following questions may be useful: existing forms. Printed forms are widely



1.



Who



2.



Do



uses the form(s)?



the forms include



How



all



important are they to the user?



the necessary information?



What items should



be added or deleted?



How many



departments recei\'e the existing form(s)? Why? In Figure 5-6, each department has a reason for receiving a copy of the purchase



3.



oixJer.



would make



It



little



sense, for instcmce,



if



the



manager



of the



production department required copies of each purchase order e\en



though puchase requisitions were



How How



4.



readable and easy to follow



initiated



by the department.



the form?



is



foim help other users make better decisions? What other uses does the form offer the user ai-ea?



5.



does the information



in the



On-Site Observation Another infonnation-gathering observation.



It is



PURCHASE ORDER



Electronics



Co



Quantity



Description



200 300 130 400 60



Transformers 392K Switches 410A Capacitors 17C Reactors 072



Unit Price



Total price



300 225



600 00



4 10



67500 41000



35 10 00



140 00 600 00



Purchasing department



and



Dick



& Son



Inc



„^ £4l.-^ -ajc Purchasing Agent



Accounts



department payable department



Computer center (processing)



Billing



routine



Purchase



V



AB



Receiving



Inventory control



(in file)



(copies of purchase order)



MHO



objects,



_-N



,



Rea No



on-site



DesT.^at 0^



Source



2 10 3 30



'»



wires 15



and noting people,



is



Date Aug 30 1985 Dehver Before Sept 30 Sh,o»,a Best way



A„,vP



ft



system studies



a Purchase Order in a Production System



foh



2



in



K



A B Dick & Son mc 4117 Waukegan Road Deerlield ill 60015



Lake Geneva. Ill •^i""



used



the process of recognizing



Distribution Flow of



FIGURE 5-6



To E B



tool



analysis



135



136



PART



TWO SYSTEMS ANALYSTS /



occurrences to obtain information.- The analyst's role is that of an information seeker who is expected to be detached therefore unbiased from the system being observed. This role permits participation with the user staff openly and freely. The major objective of on-site obsenation is to get as close as possible to the "real" system being studied. For this reason it is important that the analyst is knowledgeable about the general makeup and activities of the sv'Stem. For example, if the focus of the anahsis is communication, one needs to know as much as possible about the modes of communication i



and the aspects



available thixDugh the organization structure



layout that might



adversely affect



i



of the phvsical



communication. The following questions



can serve as a guide for on-site observations: 1.



What kind



2.



Who



3.



What



of system



is it?



runs the system? is



What does



Who



it



do?



are the important people in



the historv of the system?



How did



it



get to



its



it?



present stage of



development? Apart from its fomial function, what kind of system is it in comparison with other systems in the organization? Is it a primary or a secondarv' contributor to the organization? Is it fast paced or is it a leisurely system that responds slowly to external crises?



4.



As an observer, the analvst follows



a



set



of rules. While



making



than talk and to listen v\ith a svmpathetic and genuine interest when information is conveyed. The emphasis is not on giving advice or passing moral judgment on what is observed. Furthermore, care is taken not to argue with the persons being observed or to show hostilitv toward one person and undue friendliness toward another. observations, he/she



When human



is



more



likelv to listen



observers are used, four alternativ e observation methods



are considered:



Natural or contrived. A natural observation occurs in a setting such as the employee's place of work; a contrived observation is set up by the



1.



observer in a place



like



a laboratorv'.



Obtrusive or unobtrusive.



2.



the



An



obtrusive observation takes place



respondent knows he/she



is



when



being observed; an unobtrusive



observation takes place in a contrived



way such



as



behind



a



one-way



mirror.



Direct or indirect.



3.



A



direct observation takes place



when



the analvst



actuallv observes the subject or the system at work. In an indirect



observation, the analvst uses mechanical devices such as cameras



and



videotapes to capture information.



-



ed.



Haqjer Boyd: Ralph



(Homewood.



111.:



VVestfaU; cind Stanley Stasch,



Hichard D. Irwin, 1981), p. 125.



Marketing Research:



Tejtt



and Cases, 5th



5



/



INFORMATION GATHERING



Structured or unstructured. In a structured observation, the observer looks for and records a specific action such as the number of soup cans a shopper picks up before choosing one. Unstructured methods place the observer in a situation to observe whatever might be pertinent at the



4.



time.



methods may be used in information gathering. Natural, direct, obtrusive, and unstructured observations are fi^quently used to get an overview of an operation. The degree of structure is increased when observations have a specific purpose. An example is tracing the ix)ute of a sales invoice through a system. The degi^e of obtiusiveness may decrease vv^hen one wants to observe the tasks that make up a given job. For example, the analyst may want to create a list of the activities of a production



Any



of these



by observing him/her from a remote location. Indirect observations could be used in a similar manner. For instance, the daily routine of a bank teller may be observed indirectly via a video camera. Finally, contrived situations are used to test or debug a candidate system. They are also used in training programs to help evaluate the progress of supervisor



trainees.



Electronic observation



used information-gathering



and monitoring methods tools



For example, some truck



becoming widely because of their speed, efficiency, and low are



use an electronic recorder system that records, analyzes, and reports infomiation online about the hours and minutes a vehicle was driven faster than 60 miles per hour, the number of hours an engine was idle in a day, and how much out-of-service time a vehicle had.^ These and other electronic methods expedite the information-gathering process in systems analysis. On-site observations are not without problems: cost.



fleets



I



I



Intnjding into the user's area often results in adverse reactions by the



1.



staff.



Therefore, adequate preparation



Attitudes



2.



and



training are important.



and motivations of subjects cannot be



readily observed



— only



the actions that result from them.



Observations are subject to error due to the observer's misinterpreta-



3.



tion



and subjective selection of what to observe, as well as the work pattern during observation.



subjects'



altered



Unproductive, long hours are often spent in an attempt to observe specific, one-time activities or events.



4.



In deciding to use



an on-site observation, several questions are consid-



ered:



What behavior can be observed



1.



that



What data can be obtained more than bv other means?



2.



3



"Electronic: Data for Fleet



cannot be described in other ways?



easily or



more



Management," Fleetowner,



reliably



76, no. 6



by observation



(June 1981), pp. 76-78.



137



138



PAKT



TWO SYSTEMS ANALYSTS /



What assurances can be



3.



given that the observation process



is



not



seriously affecting the system or the behavior being observed?



What



4.



interpretation needs to be



made about observational



data to avoid



being misled by the obvious?



Hou^



5.



much



skill is



required and available for the actual observation?



For on-site observation to be done properly in a complex situation it can be veiy time-consuming. Proper sampling procedures must be used to ascertain the stability of the behavior being observed. Without a knowledge of stability; inferences drawn from small samples of behavior (small time slices) can be inaccurate.



Interviews As



and



GLuestionnaires



we



have seen, on-site observation is directed primarily toward describing and understanding events as they occur. It has limitations when we need to learn about people's perceptions, feelings, or motivations, however. Therefore, other information-gathering tools are also used for analysis. Infomiation-gathering tools can be categorized by their degree of directness. If we wash to know about something, we simply ask someone about it directly, but we may not get an answer. Most of the informationgathering tools used in systems analysis are relatively direct. This is a strength because much of the infonnation needed can be acquired by direct questions. There is information of a more difficult nature that user staff may be reluctant to give directly, however for example, information on company politics or satisfaction vvdth the supervisor. When asked by direct questions, the respondent may yield information that is invalid; yet properly handled, information can be successfully obtained with interviews or



—



questionnaires.



Interviews



The interview



is



a face-to-face interpersonal role situation in



which



a



pei'son called the interviewer asks a person being interviewed questions



designed to gather information about a problem area.^ The interview is the oldest and most often used device for gathering infoiTnation in systems work. It has qualities that behavioral and on-site observations do not possess. It can be used for two main purposes: (1) as an exploratoiy device to identify relations or verify infonnation, and (2) to capture information as it exists.



Validity



terview bias.



no small problem. Special pains are taken to eliminate inWe assume that information is more valid, the more freely it is



is



Such an assumption stresses the voluntary character of the interview as a relationship freely and willingly entered into by the respondent. If the



given.



'



Fred N. Kerlinger, Fundamentals of Behavioral Research, 2d ed. (New York: Holt, Rinehart



& Winston,



1973),_p. 481.



5



inter\ie\v



/



INFORMATION GATHERING



considei'ed a requirement, the intenlevver might gain the



is



respondent's time and attention, but cannot be certain of the accuracy of the information gathered during the inter\ievv. In



an



inter\ie\v, since the analyst



terviewed meet face to face, there



The anahst



information.



is



is



iinter\ievverl



an opportunity'



and the person



in-



for flexibilitv in eliciting



also in a position to observe the subject. In



contrast, the information obtained through a questionnaire



is



limited to the



subject's written responses to predefined questions.



There are four primarv advantages of the interview: 1.



makes the interview a superior technique for exploring areas vv here not much is known about what questions to ask or how to Its flexibilitv



formulate questions. 2.



opportunitv than the questionnaii^ to evaluate the validity of the infomiation gathered. The interviewer can observe not only what subjects say but also how they sav it.



3.



technique for eliciting information about complex subjects and for piT)bing the sentiments underlving expressed opin-



It



It



offere a better



is



an



effective



ions. 4.



Many people



enjoy being interviewed, regardless of the subject. They usually cooperate in a studv when all they have to do is talk. In contrast, the percentage of returns to a questionnaire is relativ elv low: often less than 20 peix;ent. Attractivelv designed questionnaires that ai'e simple to return, easy to follow,



and presented



in a context that inspii'es



coopera-



tion improve the return rate.



The major drawback



of the interview



is



the long preparation time.



Interviews also take a lot of time to conduct, which means time and money. So whenever a more economical alternative captures the same information, the interview



The Art



is



generally not used.



ol Interviewing.



in school, but



most



of



Interviewing



them develop



is



an



art.



Few analvsts



learn



expertise thixjugh experience.



it



The



which the v\ith no fear



interviewer's art consists of creating a permissive situation in



answers offei^d ai'e i^liable. Respondents' opinions are offered of being criticized by others. Primaw requirements for a successful interview are to create a friendly atmosphei'e and to put the respondent at ease. Then the interview pixjceeds with asking questions properlv, obtaining reliable responses,



and recording them accurately and completely.



Arranging the Interview. the physical location,



The interview should be arranged so that time of the interview, and order of interviewing assui'e



privacy and minimal interruption. Usually a neutral location that



is



non-



threatening to the respondent is preferred. Appointments should be made well in advance and a fixed time period adhered to as closely as possible. Interview schedules generally begin at the top of the organization structure



and work down so



as not to offend anyone.



139



140



PAKT



TWO SYSTEMS ANALYSTS /



Guides to a Successful Interview,



interviewing should be ap-



proached as logically as programming. In an interview, the following steps should be taken: 1.



Set the stage for the interview.



2.



Establish rapport; put the interviewee at ease.



3.



Phrase questions clearly and succinctly.



4.



Be a good



5.



Evaluate the



1.



Stage setting. This



arguments.



listener; avoid



outcome is



of the interview.



an



the analyst opens the interview by focusing on interview,



(b)



why



phase where the purpose of the



"ice breaking/' relaxed, informal



the subject



was



selected,



and



(c)



(a)



the confidential nature



of the interview. After a favorable introduction, the analyst asks the



first



question and the



respondent answers it and goes right through the interview. The job of the analyst should be that of a reporter rather than a debater. The direction of the interview is controlled by discouraging distracting conversation. During stage setting the interviewer evaluates the cooperation of the interviewee. Both the content and tone of the responses are evaluated. How well the interview goes depends on whether the interviewee is the friendly type, the timid type who needs to be coaxed to talk, or the resident e?cpert, who bombards the analyst with opinions disguised as facts. In any case, the analyst adjusts his/her own image to counter that of the interviewee. 2.



Establishing rapport. In one respect, data collection



is



an imposition on



an intrusion into their privacy. Even though the pro-



user staff time and cedure is authorized by management in advance, many staff members are reluctant to participate. There is seldom a direct advantage in supplying information to outsiders, regardless of their credentials. There is a strong perception that it may do them harm. This factor makes it important to gain and maintain rapport with the user staff. The investigation is an art. Al-



though there are no ground rules a.



b.



Do



to follow, there are pitfalls to avoid.



about the purpose of the study. A careful, well-thought-out briefing of participants should not provide any more detail than is necessary. Too much technical detail may tend to confuse people. The briefing should be consistent for all participants to avoid rumors. not deliberately mislead the user



staff



Assure interviewees confidentiality that no information they offer will be released to unauthorized personnel. The promise of anonymity is very important.



c.



d.



Avoid personal involvement in the affairs of the user's department or identification with one faction ^at the cost of another. This may be difficult when several groups are involved in the study.



Avoid shoudng other sources.



off your



knowledge or sharing information received



ftxjm



5



e.



Avoid acting



like



/



INFORMATION GATHERING



an expert consultant or confidant. This can reduce the and discourage people from freely giving



objecti\ity of the appix)ach



information.



/



Respect the time schedules and preoccupations of your subjects. Do not make an extended social e\ ent out of the meeting. If the subject does not complain, subordinates might, especialK' if they are waiting to see the subject iboss).



Do



g.



not promise amlhing you cannot or should not deliver, such as



ad\ice or feedback. h.



/.



Dress and beha\e appropriately for the setting and the circumstances of the user contact.



Do



not interrupt the interviewee. Let



him her



finish talking.



Asking the questions. E.xcept in unstructured interxlews. it is important that each question is asked exacth' as it is worded. Rewording or impromptu explanation ma\' pro\oke a different answer or bias the response. The questions must also be asked in the same order as they appear on the interview schedule. Reversing the sequence could destroy the com3.



each question must be asked unless the pluvious respondent, in answering a question, has already answered the parabilitv of the interviews. Finally,



next one. 4.



Obtaining and recording the response. Interviewers must be prepared to



coax respondents to elicit further information when necessarv The probing" technique enables the interviewer to act as a catalyst, for example: .



a.



Interviewer:



b.



.Analyst



I



see



what you meain. Could you elaborate further on



How do you



that?



about separating the present loan division into commercial and loan departments? (



interview eri:



feel



Financial vice president (respondent): Well, I'm not sure.



think that



we have



Analyst:



see.



I



Sometimes



I



to take this route eventually.



Can you



tell



me more



about that?



These statements indicate that the analyst is listening, is interested, understands what the respondent is trying to say, and is making an effort to gain



more information. The information received during the interview



recorded for



is



later analysis.



Data recordins. and the notebook. Manv svstem studies fail because of poor data recording. Care must be taken to record the data, their source, and the time of collection. If there is no record of a conversation, the analyst runs the risk of not remembering enough details, attributing them to the wrong source, or otherwise distorting the data. 5.



The form of the notebook varies according to the tvpe of study, the amount of data, the number of analysts, and their individual preferences. The "notebook may be a card file, a set of carefully coded file folders, or a looseleaf binder. It should be bound and the pages numbered. The information shown in Figure 5-7 should be included in the notebook. "



141



142



PART



TWO SYSTEMS ANALYSTS /



Data Capture and the Notebook



FIGURE 5-7 1.



all notes taken during investigation are documented. They are the chief sources of interview and observational data, as well as background infomiation on the system. Each page of notes should be numbered serially, and a running chronological record of them should be kept. The name of the analyst, the date the notes were taken, and surrounding circumstances are all important. Since handwritten notes often are not intelligible to others, it is good to have them transcribed or typed soon after they are taken.



2.



Copies of



3.



Copies of all



Originals or duplicate copies of



— — data — originals or duplicates — are included. Loss of key data, even



all information-gathering tools questionnaires, interview schedules, observation guides are placed in the notebook for futui-e reference.



temporarily, can be costly. 4.



Minutes of all meetings as well as a record of discussions, decisions, and changes in design all become part of the notebook.



The organization



of the notebook



purely chronological arrangement will



is



also important. In



some



cases, a



system of categories udth cross-classification would be appropriate. Proper indexing makes it easier to retrieve information when needed. suffice. In others, a



CLuestionnaires In contrast to the interview



is



the questionnaire,



which



is



a term used



has questions to which individuals respond. It is usually associated with self-administered tools with items of the closed or fixed alternative type. By its nature, a questionnaire offers the following advantages: for almost



any



tool that



economical and requires



less skill to



administer than the interview.



1.



It is



2.



Unlike the interview, which generally questions one subject at



at time,



a



questionnaire can be administered to large numbers of individuals simultaneously. 3.



The standardized wording and order



of the questions



and the



stan-



dardized instructions for reporting responses ensure uniformity of questions. In contrast, the interview situation is rarely uniform ft-om



one interview 4.



to the next.



The respondents



feel



greater confidence in the anonymity of a ques-



tionnaire than in that of an interview. In an interview, the analyst



knows the user



by name, job function, or other identification. With a questionnaire, respondents give opinions without fear that • the answer will be connected to their names. usually



5.



staff



The questionnaire places



less pressure



on subjects



for



immediate



re-



sponses. Respondents have time to think the questions over and do calculations to provide



The advantages vantages, especially



more accurate



data.



of the self-administered questionnaire outweigh disad-



when



cost



is



a consideration.



The



principal disadvan-



5



'



INFORMATION GATHERING



low percentage of returns. Another disadx antage is that many people ha\e difficultv expressing themsehes in writing, especialh' when responding to essa\' lopem questions. Many dislike writing. Because of these disad\antages, the inteniew is probabK' superior to the questiontage



is



a



naire.



Types of Interviews and €Luestionnaires and questionnaires



wideh' in form and stnjcture. Inteniews range fixjm the highh unstructured, where neither the questions nor the respecti\e responses Jire specified in ad\ance, to the highl\' structured alternative in which the questions and responses are fixed. Some variation within this range is possible. Interxiews



\ar\'



The Unstructured Alternative The unstructured gathering technique.



inteixiew



is



a relatively nondirectix'e information-



allows respondents to answer questions freeh in



It



own



words. The responses are spontaneous rather than forced. They are self-re\'ealing and pei-sonal rather than general and superficial. The role of the analyst as an inter\iewer is to encourage the respondent to talk finely and ser\e as a catalyst to the expression of feelings and opinions. This is best achie\ed in a permissi\e atmosphere in which the subjects ha\e no their



feeling of disappixtxal.



The Structured Alternative In the structured appixjach, the questions are presented with exactly



the



same wording and



in the



same order



to



all



subjects.



If



the analyst asks a



"Would \ou like to see a computerized approach to sohing \our accounts recei\able problem?" and asks another subject, 'How do \ou feel about computers handling accounts receixable?" the response may not be the same even though the subjects both ha\e the same opinion. Standardized questions impro\'e the reliabilit\' of the responses by ensuring that all subjects are responding to the same questions. subject,



Structured inter\iews and questionnaires ma\' stajcturing of the questions. Questions



diff^er



in the



amount



of



may



be either closed or openended. An open-ended question requires no response direction or specific response isee Figure 5-8i. In a questionnaire, it is written with space



Examples



FIGURE 5-8 •



of



Open-Ended Questions



\o\v that \ou ha\e had the new installation for



six



months, how would you



evcduate the benefits.^



•



Wtiat



•



If



is



your opinion regarding the "no smoking"



you had



center?



a choice,



how would you



polic\' in the



DP



center?



ha\e designed the present information



143



144



PAST



TWO / SYSTEMS ANALYSTS



FIGURE 5-9 What



is



the



How many •



What



is



Examples name



of Fill-in-the



of the



anailysts



the average



MIS



Blank Questions



director of your firm?



handle the accounts receivable conversion?



number



of calls



you



receive from clients?



provided for the response. Such questions are more often used in interview's than in questionnaires because scoring takes time. Closed questions are those in which the responses are presented as a set of alternatives. There are five major varieties of closed questions: Fill-in-the-blanks questions request specific information (Figure 5-9).



1.



These responses can then be



Dichotomous



2.



statistically



analyzed.



(yes/no type) questions that offer



two answers (Figure



5-10) have advantages similar to those of the multiple-choice type (ex!\\



The problem



making certain that a reliable response can be answered by yes or no; otherudse, an additional choice (e.g., yes, no, I don't know) should be included. The question sequence and content are also plained



later).



is



important.



Ranking scales questions ask the respondent to rank a list of items in order of importance or preference. In Figure 5-11, the first question asks the respondent to rank five statements on the basis of how they describe his/her present job. 3.



Multiple-choice questions offer respondents specific answer choices (Figure 5-12). This offers the advantage of faster tabulation and less analyst



4.



bias



due



to the order in



which the answers are



favorable bias toward the



which answer choices are



first



given.



Respondents have a



alternative item. Alternating the order in



listed



may reduce



bias but at the expense of



additional time to respond to the questionnaire. In any case,



FIGURE 5-10 •



If



not,



important



Dichotomous Questions



no



do you plan



yes



•



of



is



Are you personally using a microcomputer in your business? (please circle one) yes



•



Examples



it



no



to



be using one in the next 12 months? (please



performance of your work, are you personally involved hardware/software purchase decisions? (please circle one) In the



yes



no



circle one)



^ in



computer



5



FIGURE 5-11



An Example



ol



/



INFORMATION GATHERING



a Ranking Scales Question



statements in each group on the basis of how well they describe the job mentioned on the front page. Write a "1" by the statement that best describes the job; write a "2" by the statement that provides the next best description, and Please rank the



five



continue ranking



statements, using a "5" for the statement that describes the



all five



job least well.



Workers on



this job



are busy



all



.



.



.



the time.



have work where they do things for other people. try



out their



own



ideas.



are paid well in comparison with other workers.



have opportunities for advancement.



to



be aware of these types of bias



when



constructing multiple-choice



questions.



Rating scales questions are an extension of the multiple-choice design. The respondent is offered a range of responses along a single dimension. In 5.



Figure 5-13, the respondent



is



asked to rate various aspects of his/her job on



a scale of 1-5.



Open-ended and closed questions have advantages and limitations. Open-ended questions are ideal in exploratory situations where new ideas and relationships are sought. The main drawback is the difficulty of inter-



FIGURE 5-12 •



What



is



Examples



of Multiple-Choice Questions



the average salary of an entry-level analyst? (please check one)



Under $15,000 $15,000-$19,999 $20,000-524,999



Over $25,000



•



Please check one category that best describes the business of the firm are employed.



where you



Savings bank College, school, library, association



Computer



service



Industricd



company



Outside computer consulting



Other (please describe)



.



145



—



146



PAST



TWO SYSTEMS ANALYSTS /



An Example



FIGURE 5-13 •



How



satisfied are



circle



one



a Rating Scale Question



of



you udth the following aspects



of



your present job? Iplease



each question)



for



Very Dissat-



Very Dissat-



No



Sat-



Sat-



isfied



Opinion



isfied



isfied



isfied



1.



2.



3.



The way my job provides steady employment



for



1



The chance to be responsible for the work of others The pleasantness



1



of the work-



ing conditions 4.



The chance



1



make use



to



of



my



best abilities



1



preting the subjective answers



and the tedious responses



to



open-ended



questions. Other drawbacks include potential analyst bias in interpreting



the data and time-consuming tabulation. Closed questions are quick to analyze, but typically most costly to prepaid. They are more appropriate for



securing factual information (for example, about age, education, sex, and salaiy). They have the additional advantage of ensuring that answers are given in a frame of reference consistent with the line of inquiiy. A summary of structured



HGURE



5-14



and unstructured interview techniques



and A Summary Structured



is



given in Figure 5-14.



Unstructured Interview Techniques-



Interview



Type



Advantages



Structured



1.



Easy ate



to



due



Drawbacks administer and evalu-



1.



High



to standardization



2.



Standardization of questions



2.



Requires limited training



3.



Easy



to train



new



staff



1.



Pi"o\ides for greater creativity



and spontaneity



3.



Facilitates



Mechanizes interviewing, which makes it impractical



2.



and



standing of the intervipwee Offere greater flexibility in con-



ducting an overall inter\aevv



for



interview settings



Moi'e infoiTiiation of questionable use



deeper understand-



ing of the feelings



3.



1.



in in-



terviewing 2.



pi'eparation cost



tends to reduce spontaneity



all



Unstructured



initial



is



gathered



Takes more time to conduct therefore, costly



3.



Requires extensive training and



experience for effective



i-esults



5



Procedure for CLuestlorinalre Construction The procedure for constructing a questionnaire 1.



Decide what data should be collected; that



is,



/



INFORMATION GATHERING



consists of six steps:



define the pix)blem to be



investigated. 2.



Decide what type of questionnaire (closed or open-ended) should be used.



3.



Outline the topics for the questionnaire and then write the questions.



4.



Edit the questionnaire for technical defects or biases that reflect per-



sonal values.



how well



it



a final editing to ensure that the questionnaire



is



5.



Pretest (try out) the questionnaire to see



6.



Do



istration.



This includes a close look



at



works.



ready for admin-



the content, form,



of questions as well as the appearance



and



and sequence



clarity of the pixjcedure for



using the questionnaire.



A



critical



reliable



and



aspect of questionnaire constiuction is the formulation of questions. To do a satisfactoiy job, the analyst must focus



\'alid



on question content, wording, and fomiat. The following what to consider: 1.



is



a checklist of



Question content. the question necessary?



a part of other questions?



a.



Is



b.



Does the question adequately cover the area intended? Does the subject(s) have pi-oper information to answer the ques-



c.



Is



it



tion? d.



Is



the question biased in a given direction?



e.



Is



the question likely to generate emotional feelings that might lead



to



untrue responses?



2.



Question wording. Is the question worded for the subject's background and experia. ence? b. Can the question be misinterpreted? What else could it mean to a respondent? c. Is the frame of reference uniform for all respondents? d. Is the wording biased toward a particular answer? How clear and direct is the question? e.



3.



Question format. Can the question best be asked in the forni of check answer (ana. swered by a word or two or by a number) or with a follow-up free answer? Is the response form easy to use or adequate for the job? b. Is the answer to the question likely to be influenced by the precedc. ing question? That is, is there any contamination effect?



147



148



PAKT



TWO SYSTEMS ANALYSTS /



Reliability of the user staff are



Data from Respondents.



presumed



which events occur.



If



to



The data coUected ftxjm accurately correspond with the actual way in



such reports are the only source of data, there may be



several uncontrolled sources of error: 1.



The respondent's perceptual



slant.



is known to vary. members who have no



Perceptual ability



Reports of a given event ftxjm several



staff



training in careful observation often have



little



resemblance



to



one



another. 2.



The respondents



failure to



remember just what did happen. Assuming



that he or she receixed a fairly reliable impression of



time that it happened, it generally becomes more passage of time to describe the details of an event.



an event



difficult



at



the



with the



3.



Reluctance of persons being interviewed to report their "true" impressions of what occurred. A subject often distorts descriptions of events for fear of retaliation, a desire not to upset others, or a general reluctance to verbalize a particular type of situation.



4.



Inabilitv'



of subjects to



communicate



their reports or inability of the



analyst to get from subjects the information that they are qualified to



pro\1de.



The RellabUitY-ValldltY Issue .An information-gathering instrument faces two major tests: reliability and validitv'. Before administering the instrument, the analyst must ask and answer the questions: What is the reliability of the measuring instrument? What is its validity'? The term reliability is synonymous with dependability, consistency, and accuracy. Concern for reliability comes from the necessity for dependability' in measurement. Using the questionnaire as an example, reliabilit\' ma\' be approached in three ways: 1.



we



administer the same questionnaire to the same subjects, will we get the same or similar results? This question implies a definition of If



reliabUty as stability, dependability, 2.



3.



and



predictability.



Does the questionnaire measure the true variables it is designed to measure? This question focuses on the accuracy aspect of reliability.



How much



measurement is there in the proposed questionnaire? Errors of measurement are random errors stemming from fatigue error of



or fortuitous conditions



at a



given time, or fluctuations in



mood



that



temporarily affect the subjects answering the questionnaire. To the extent that errors of



measurement



measurement



Ibid.,



p 442.



in



are present in a questionnaire,



is \iewed as the a measuring instrument.^



unreliable. Thus, reliability'



relative



it



is



absence of errors of



5



/



INFORMATION GATHERING



suppose we administered a questionnaire to measure the attitude of the user staff toward a new computer installation. The "true" scores of the five staff members were 92 (excellent attitude), 81, 70, 59, and 40. Suppose further that the same questionnaire was administered again to the same group within the same time period and the scores were 96, 82, 69, 61, and 55. Although not a single case hit the "true" score again, the second test showed the same rank order. The reliability in this example is extremely



To



illustrate,



high.



Now



suppose



had been



that the last set of scores



same



72, 89, 51, 74,



and



67.



but they have a different rank order. In this They case, the test is unreliable. Figure 5-15 shows the three sets of scores. The rank orders of the first two sets of scores covary exactly. Even though the test scores in the two columns are not the same, they are in the same rank order. To this extent, the test is reliable. The opposite case is shovvoi in columns (1) and (3). The rank order changed, making the test unreliable. It can be seen, then, that for an information-gathering instrument to be interpretative, it must be reliable. Unreliable measurement is overloaded uith error. Although high reliability is no guarantee of good questionnaire results, there can be no good results without reliability. It is a necessary, but not sufficient, condition for the value of questionnaire results and their are the



five scores,



interpretation.



The most common question that defines validity is: Does the instrument measure what we think it is measuring? It refers to the notion that the questions asked are worded to produce the information sought. In contrast, reliability means that the information gathered is dependable enough to be used for decision making. In validity, the emphasis is on what is being measured. For example, an analyst administers a questionnaire to a user group to measure their understanding of a billing procedure and has included in the questionnaire only factual items that identify the parts of the billing system. The questionnaire is not valid because, whereas it may measure employees' factual knowledge of the billing system, it does not measure their understanding of it. In other words, it does not measure what



FIGURE 5-15



Reliable



(1)



"True" Scores



and



Unreliable Test Scores



(2)



(3)



Scores fix)m



Scores from Unreliable



Reliable



Questionnaire



Rank



1



72



3



2



89



1



3



51



5



61



4



74



2



55



5



67



4



Rank



Questionnaire



92



1



96



81



2



82



70



3



69



59 40



4 5



Rank



149



"



150



PART



TWO SYSTEMS ANALYSTS /



the analyst intended to measure. For this reason, it questionnaire for validity as well as for reliability.



important to pretest a



is



can be concluded, then, that the adequacy of an information-gathering tool is judged by the criteria of validity and reliability. Both depend on the design of the instrument as well as the way it is administered. It



Summary 1.



Much of the information organization, the user



that staff,



we need to



analyze a system relates to the



and the work



flow. Organization-based



information deals vvdth policies, objectives, goals, and stnjcture. Userbased information focuses on job functions, information requirements, and interpersonal relationships. Work-based infomiation addresses the



methods and procedures, and work schedules. We are interested in what happens to the data through various points in the



work



flow,



system. 2.



Information



is



gathered ft-om sources within the organization and ft'om



the organization's environment. External sources include vendors, gov-



ernment documents, and professional



journals.



The primary



internal



sources are financial reports, personnel, system documentation, and users. 3.



The primary information-gathering tools are documentation, on-site observation, interviews, and questionnaires. The most commonly used tool



4.



is



the interview.



The major



objective of on-site observation



system being studied. The methods used



is



to get close to the "real



may be



obtrusive or unobtrusive, direct or indirect,



natural or contrived,



and structured or unstruc-



The main limitation of observation is the difficulty of observing attitudes and motivation and the many unproductive hours that often tured.



are spent in observing one-time activities. 5.



The interview is a face-to-face interpersonal meeting designed to identify relations and capture information as it exists. It is a flexible tool, offering a better opportunity than the questionnaire to evaluate the



The major drawback



is preparation experience in arranging the interview, setting the stage, establishing rapport, phrasing questions clearly, avoiding arguments, and evaluating the outcome.



validity of the information gathered.



time. Interviewing



6.



an



art that requires



The questionnaire is a self-administered tool that is more economical and requires less skill to administer than the interview. It examines a large number of respondents at the same time, provides standardized wording and instiuctions, and places less pressure on subjects for immediate response. The main drawback is the low percentage of returns.



7.



is



^



may be structured or unstructured. The respondents to answer questions freely unstructured approach allows



An



interview or a questionnaire



5



/



mPORMATION GATHERING



own



words, wheras the structured approach requires a specific response to open-ended or closed questions. in their



8.



There are



five



major



xarieties of closed questions:



a.



Fill-in-the-blanks questions inquest specific information.



b.



Dichotomous questions



c.



d. e.



two-answer choice. Ranking scales questions ask the respondent to rank a list of items in oixler of importance or pi-eference. Multiple-choice questions ask for specific answer choices. Rating scales questions ask the respondent to rank \arious items along a single dimension scale). offer a



i



9.



must focus on question content, wording, and fomiat. These are considered with \alidit\' and In constructing a questionnaire, the anal\st



mind. There are uncontrolled sources of error, however, that stem from the respondent's perceptual slant, failure to remember specific details, reluctance to I'eport the "true" impressions of what reliabilitv in



occurred, or 10. .An



inabilitv' to



communicate information.



information-gathering instrument faces the tests of reliabilitv and



SNTiommous with dependabUitN', consistencv, and accuracy, whereas \'alidit\' emphasizes what is being measured. It should measure what the analvst intended to measure.



\alidit\



.



Reliabilit\' is



Key Words Closed Question Contri\ed Obser\ation



Open-Ended Question



Dichotomous Question Direct Obser\'ation



Ranking Scales Question Rating Scales Question



Fill-in-the-Blanks Question



Reliabilitv



Indirect Obser\ation



Structured Interxiew



Infomiant



Structured Obser\ation



Inter\iew



L'nobtrusixe Observation



Multiple-Choice Question Natural Obser\ation



Unstructured Interview Unstructured Observation



Obtrusive Obser\ation



X'aliditv



Questionnaire



On-Site Obserxation



Review QiUestions 1.



What



categories of information are available for analvsis?



one decide on the category 2.



Why



is



policies 3.



it



How would



for a given project?



important that the analyst learns about an organization's



and



objectives?



Information is available from internal and external sources. Under what circumstances would the analyst depend more heavily on external than internal information? Whv?



151



152



PART



TWO SYSTEMS ANALYSTS /



4.



How



5.



What



6.



is



the informant useful in systems analysis? Explain.



traditional information-gathering tools are available for the ana-



lyst?



Explain each tool



Visit



the computer center of a local firm. Review a user manual and



briefly.



report your findings. 7.



What



8.



How would



is



considered in evaluating forms? Explain.



one conduct an and cons of



specify the pros 9.



10.



on-site observation? Lay out a plan



and



this tool.



you were asked to observe observation method would you



select?



Summarize the advantages and



limitations of interviews



computer operator



a



If



at



work, what



Why? and question-



naires.



what purposes would one use an interview rather than other data-collection methods? Explain.



11.



Under what circumstances or



12.



Explain the difference between (a) structured and unstructured intervieudng and (b) open-ended and closed questions. Give an example



for



of each.



and explain the primary steps



in interviewing.



13.



List



14.



Explain briefly the procedure used to construct questionnaires.



15.



If



you were



to interview a user to obtain biographical information (age,



education, years of experience on the job, and so forth) about the staff of



and you have only one hour to acquire the information, which of the follovvdng methods would you use and why? Structured interviews using open-ended questions. a. 10 employees



minutes each.



b.



Unstructured interviews of



c.



Self-administered questionnaires.



d.



Structured interviews using closed questions.



what respect



five



interviewing an art? Explain.



16.



In



17.



Suppose you have completed the would you pilot test it?



18.



What sources



is



first



draft of a questionnaire,



how



of error affect the reliability of data from respondents?



Elaborate. 19.



What



is



rapport? As an analyst,



with the user's



stafi?



how do you



gain and maintain rapport



Give an example.



Why?



20.



What kinds



21.



Distinguish between validity and



22.



Explain and give an example of each variety of closed questions:



of data should be recorded?



a.



Fill-in-the-blcinks questions.



b.



Dichotomous questions.



c.



Ranking scales questions.



d.



Multiple-choice questions.



e.



Rating scales questions.



«,



reliability.



How



are they related?



5



/



INFORMATION GATHERING



Application Problems



assembly plant contacts the manager of the production department. She briefs him on the survey she is taking and asks the manager to help her get answei^ to some questions. The manager is cordial, and he invites her to come over. The foUovvdng



The systems



emjilyst of a radio



interview takes place.



What



Analyst:



is



We



Manager:



the main function of your department?



assemble radios from components and ship them to



order.



How many people work here? Manager: Why do you want to know?



Analyst:



Analyst:



It



could be that you have too



Manager: Maybe



I



should be the judge of



Analyst [ignores answer^. What's that



She hasn't done



hall?



Manager: She



many people on your



girl



a thing since



shipping orders. more orders fiDm purchasing. verifies



Why do you



need



It



I



that.



doing in the room across the walked in here.



could be that she



check these orders ready been cleared for production?



Analyst:



payroll.



to



when



is



waiting for



they have



Manager: We've had occasions when the units ordered belong than one person or to another address. Analyst:



wjmt



I



the clerk's



What



Analyst:



Meyer:



I



The manager walks udth the anaHe introduces the analyst to her.



reluctantly agrees.



desk. She



woric



verify the



do you



is idle.



do, Miss



Meyer?



goods against shipping orders.



How do you know that



Analyst:



more



to talk to her.



The manager lyst to



to



al-



the shipping orders are correct?



guess I don't, but I verify the type, number of units ordered, and shipping address against the units produced before they are loaded on the truck.



Meyer:



I



Analyst: Aren't



you wasting your time doing



this?



Meyer: You'll have to ask Mr. Kehoe (the manager)



The manager, stcmding by, begins talks to the manager while in Meyer's Analyst: That's



other



girls



all



I



wanted



doing there?



that.



to get irritated.



The



analyst



now



area.



to find out fixjm this area.



What



are those



153



154



PAKT



TWO SYSTEMS ANALYSTS /



Manager: They're preparing bills of lading, taping the fiiTns's logo on the cartons, and making sure that the bill accompanies each order. Analyst: I'd like to walk over there



and



talk



with one of them.



won't



It



take a minute.



Manager: The\



breaking in a



we



have



it



now. Jane o\er on the



prett\' bus\' right



're



new girl we



just hired.



documented.



all



If



you



right



be glad to gi\e \ou a copy in



I'd



is



are after the pre)cedure,



my



ofiice.



how up



Analyst: I'm not sure



hear



it



to date



your documentation



is.



I'd



rather



from them.



The manager leads the analyst to the west comer of the warehouse where four giris are t\ping. He intix)duces the analvst to the senior clerk.



How many bills



Analyst:



of lading does



your average



typist



prepare per



day? Senior clerk: Around Analvst: \'ou ha\'e



fi\'e



The



First,



70.



t\pists here, including yourself



w as



output yesterda\ Senior clerk:



ma\'be



60;



only 200.



as \'ou can see, we're training a



girls also file, call



customers



We



stay busy.



way, and the Analyst: This



like.



is fine,



Senior clerk: Well,



and ha\e them Analyst: Don't



to tell



but what else do



we



and your



total



What happended?



the\'



them



new person



that the oixJer



is



here.



on



its



do?



take the bills of lading to the drivers at the



dock



sign for the shipment.



you think



that this i-unning are)und



is



a



waste of time?



Senior clerk: [no answer]



Assignment a.



How do you



b.



What type



c.



What questions were open-ended? Closed?



d.



e.



rate the interview? Elxplain.



of interview



was conducted by the



Should the analyst have asked the questions respondents? V\'hv?



analyst?



in the



same sequence



to all



Critique the analyst's questions in terms of their content, wording,



and



format.



/



If



you were the



interview.



analyst, illustrate



how



\'ou



would ha\e conducted the



5



/



INFORMATION GATHERING



The dean of students of a major university requested the development of a nonacademic transcript (NAT). The NAT has the objective of maintaining a I'ecord of each student's extracurricular activities while in



school. Three benefits are listed: a.



Faculty



may gain



better insight into student activities



recommendations mittees, without b.



Facultv'



to employer's, graduate schools, or



much



when making awards com-



effort.



can work with students to coordinate career or educational



goals vvith extracurricular commitments. c.



Students



may submit



their



resumes and produce a



sepai^ate record



of extracurricular activities for a prospective employer. ployer, in turn,



may access such



The em-



records, with the student s permis-



sion.



To determine the



feasibility,



the college of business at the university



as a prototype. It was hoped that the results could then be applied across the univereity. To determine the various organizations on campus, interviews were conducted with the staff of the dean's



was used



office,



the career planning director of the business school,



registrar. Extracurricular activities a.



were



Greek organizations, including fi^aternity



and



and the



classified into four groups:



fi'aternities,



soix)ritieS;



and



inter-



intersorority councils.



b.



Organizations recognized by the school council.



c.



University-affiliated organizations.



d.



Athletics (men's



jmd women's) as well



as varsity



and junior



varsity.



The questionnaire shown here was used to collect data from fourthyear MIS students at the college of business. After the data were tabulated, the specific format of the NAT was developed and information was entered into the data base. Since an IBM PC lab was readily available, a dBASE II package was used to implement the prototype.



Assignment a.



What type



of questionnaire



was used?



Critique the questionnaire in terms of tion, c.



its



length, completeness, organiza-



and sequence. What changes would you make?



was selected for determining feasibility, should all univerhave been included rather than only those that were unique to



Since a prototype sity actiwties



business students?



Why?



155



:



:



;



.



PART



156



TWO SYSTEMS ANALYSTS /



Instructions



NONACADEMIC TRANSCRIPT DATA COLLECTION FORM filling out the top portion of this form, After please check each activity on the list below that you were involved in during your enrollment at the university. SSN



Name first



last



m. 1



Current Address



Phone



:



_



School Year:



Major Please check each activity or activities in which you have been or are currently involved. Indicate your level of involvement and each year of participation (e.g.. 2 = second year) .



Example Activity



*^ Alpha Epsilon



Level of Involvement Pi



Vice president. rush chairman



Years Participated



®©©©



Greek Organizations



Level of Involvement Activity Alpha Epsilon Pi Alpha Phi Alpha Alpha Tau Omega Beta Theta Pi Chi Phi Chi Psi



Delta Kappa Epsilon Delta Sigma Phi



Years Participated



12 12 12 12 12 12 12 12



3 3 3 3 3 3 3 3



4 4 4 4 4 4 4 4



5



Activity



/



INFORMATION GATHERING



Level of Involvement



157



Years Participated



12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12



Delta Tau Delta Delta Upsilon Kappa Alpha Kappa Alpha Psi Kappa Sigma Omega Psi Phi Phi Beta Sigma Phi Delta Theta Phi Epsilon Pi of ZBT Sigma Phi Epsilon Sigma Pi Tau Kappa Epsilon Theta Chi Theta Delta Chi Zeta Psi Inter-Fraternity Council



3 3 3 3 3 3 3 3 3



3 3 3 3 3 3 3



4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4



Organizations Recognized by Student Council Activity



Level of Involvement



Aikido Club AFROTC Cadet Group Akindelas Fraternity, Inc. Alpha Phi Omega Theta Chapter American Advertising Federation Amnesty International, USA AROTC Cadet Assoc. Asian Studies Club Assoc, for Arab American Understanding Assoc, for Computing Machinery (ACM) Baptist Student Union Beta Alpha Psi Black Engineering Society Black Student Alliance Black Voices Blue Ridge Mountain Rescue Group Bowling Club B'nai Brith Hillel



Years Participated



12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12



3



4 4 4



3



4



3 3 3 3



4 4 4 4



3



4



3 3 3 3 3 3



4 4



3 3



3 3 3



4 4 4 4



4 4 4



I



|



included. 6.



Recommendations and conclusions suggest to management the most beneficial and cost-effective system. They are written only as a recommendation, not a command. FoUouang the recommendations, any con-



may be included. Appendices document all memos and data compiled clusions ftxjm the study



7.



tigaiton.



They



are placed at the



of the report for reference.



has been conducted properly. When a feasibility team has maintained good rapport with the user and his/her staff it makes the recommendations easier to approve. Technically, the report is only a recommendation, but it is an authoritative one. Management has the final say. Its approval is required before system design is initiated. Chapter 9 covers in detail the design phase of the system Disapproval of the



'-»J



end



during the inves-



life



feasibility report is rare



if it



cycle.



Oral Presentation The



good written presentation documenting the activities involving the candidate system. The pivotal step, however, is selling the proposed change. Invariably the project leader or analyst is expected to give an oral presentation to the end user. Although it is not as polished as feasibility report is a



the written report, the oral presentation has several important objectives.



The most



critical



requirements for the analyst



who



gives the oral presenta-



and knowledge about the candidate system that can be translated into language understandable to the user, and (2) the ability to answer questions, clarify issues, maintain credibility, and pick up on any new ideas or suggestions. The substance and forni of the pi^sentation depend largely on the purposes sought. Figure 7-1 suggests a general outline. The presentation may aim at inforaiing, confirming, or persuading. tion are



1.



(1)



communication



Infiirming. This simply



skills



means communicating the decisions already



reached on system recommendations and the resulting action plans to those who will participate in the implementation. conclusions are included.



No



detailed findings or



^



Confirming. A presentation with this purpose verifies facts and recommendations already discussed and agreed upon. Unlike the persuading



2.



7



FIGURE 7-1



/



FEASIBIUnr STUDY



Oral Presentation— Suggested Outline



Intixxduction.



I.



A.



Introduce



B.



Introduce topic.



C.



Briefly describe current system. 1.



self.



Explain



why



it



is



not



soMng



the problem.



2.



Highlight user dissatisfaction with



it.



3.



Briefly describe scope, objectives,



and i-ecommendations



of the pix)-



posed system.



Body



II.



of presentation.



A.



Highlight weaknesses of current system.



B.



Describe proposed system.



C.



Sell



D.



and expenses. 2. Use \asual aids to justify pix)ject and explain system. Summarize implementation plan and schedule. 1.



How



is it



going to solve the problem?



prxjposed system. Specifv sa\ings



and



benefits, costs



Review human resouix;es requirements to Conclusion. E.



III.



A. B.



C.



D.



system.



Summarize proposal. Restate recommendations and objectives of proposal. Summarize benefits and savings. Ask for top-level management support. Solicit go-ahead



Discussion period



rv.



install



for project,



— .Answer questions convincingly.



approach, no supportive evidence is presented to sell the proposed change, nor is there elaborate reasoning behind i^conimendations and conclusions. Although the presentation is not detailed, it should be complete. Confirming is itself part of the process of securing approval. It should reaffiim the benefits of the candidate system and provide a clear statement of results to be achieved. Persuading. This



3.



is



a presentation pitched toward selling ideas



—



tempts to convince executives to take action on recommendations implementing a candidate system.



at-



for



Regardless of the purpose sought, the effectiveness of the oral presentadepends on how successful the project team has been in gaining the



tion



confidence of frontline personnel during the initial investigation. How the recommendations are presented also has an impact. Here are some pointers 1.



on



how



to give



Rehearse and in



an



test



oral presentation:



your ideas before the presentation. Show that you are



command. Appear



relaxed.



recommendations are more easUy accepted if they are presented as ideas for discussion, even though they seem to be settled and final.



2.



Final



3.



The presentation should be



brief, factual,



and



interesting. Clarity



and



209



.



210



PAKT



TWO SYSTEMS ANALYSTS /



persuasiveness are interest 4.



critical. Skill is



needed



to generate



enthusiasm and



throughout the presentation.



Use good organization. Distribute relevant material to the user and other parties in advance.



5.



Visual aids (graphs, charts) are effective



and imaginative. An communicated 6.



effective



if



they are simple, meaningful,



graph should teach or



tell



what



is



to



be



Most important, present the report in an appropriate physical environment where the acoustics, seating pattern, visucil aid technology, and refreshments are



all



available.



The most important element to consider is the length of the presentation. The duration often depends on the complexity of the project, the interest of the user group, and the competence of the project team. A study that has compan3/vvdde applications and took months to complete would require hours or longer to present. The user group that was involved at the outset would likely permit a lengthy presentation, cilthough familiarity with the project often dictates a brief presentation. Unfortunately,



many



presentations tend to be a rehash of the written document, with



or excitement. Also,



when



little flare



the analyst or the project leader has a



reputation and success record from previous projects, the



oral



good



end user may



request only a brief presentation.



Summary 1.



A



study is conducted to select the best system that meets performance requirements. This entails an identification description, an evaluation of candidate systems, and the selection of the best system feasibility



for the job. 2.



A systems



required performance



defined by a statement of consystem objectives, and a descripthen ready to evaluate the feasibiUty of is



straints, the identification of specific



tion of outputs.



The



analyst



is



candidate systems to produce these outputs. 3.



Three key considerations are involved in



and



feasibility analysis:



economic,



Economic analysis (known as cost/benefit whether the adoption of a system can be costjustified. Technical considerations evaluate existing hardware and softw^are. Behavioral feasibility determines how much effort will go into educating, selling, and trciining the user staff on a candidate system. technical,



behavioral.



analysis) determines



4.



There are eight steps in a feasibility study: a. Form a project team and appoint a project leader. b. Prepare system flowcharts. c. Enumerate potential candidate systems. d.



Describe and identify characteristics of Ccindidate S3^tems.



7



/



FEASIBILITY



STUDY



Determine and evaluate performance and cost effectiveness of each



h.



candidate system. Weight system performance and cost data. Select the best candidate system. Prepare and report project directive to management.



Key Words Candidate System Cost/Benefit Analysis Feasibility



Study



Response Time Source Code Source Language



Review GLuesfions 1.



What makes up a system peiformance definition? Select a situation with which you are familiar and explain the steps to prepare the definition.



2.



"Many feasibility studies produce Do you agree? Why? Explain.



3.



What considerations are involved in feasibility analysis? Which consideration do you think is the most crucial? Why?



4.



Elaborate on the steps in feasibility analysis.



them 5.



to four steps,



disillusions to users



If



and



you were



analysts."



to shorten



which ones would you pick? Why?



How important



is



in every study?



Whei^



a project team in feasibility analysis?



Is



it



mandatory



are the exceptions?



6.



Use Table 7-3 as the basis for determining alternative performance/cost factors between the IBM PC jr. and Apple's Macintosh systems. Which one would you recommend for the safe deposit department of the bank?



7.



What makes up



a feasibility report?



How would you change it? Explain.



Application Problems



SAFE DEPOSIT TRACKING SYSTEM Introduction



The



member



First



National Bank of South Miami



of the Federal Reserve



is



a full-service bank



and a



and the Federal Deposit Insurance



211



212



PAKT



TWO SYSTEMS ANALYSTS /



Corporation. At the close of 1983, the bank had assets totaling S159 million, capital of more than S19 million, deposits of SI 13 million, and a loan base of S37 million. Rated the 37th safest bank in the United States,



has a highly successful management team and 119 employees in a single-stor\' building in the heart of downtown South Miami. The bank operates two remote automatic teller machine lATM) First National



locations



and



a dri\ e-in



facility.



The



original orientation



was toward the



community,', ser\1ng the people in the immediate area. Although



primarily a communit\' bank, First Xational



is



still



becoming increasingly



commerical as more industrial firms move into South Miami, especially around a major uni\"ersit\' where the bank is located. Available are complete banking and trust senices ranging from XOW accounts and money market certificates to commercial, installment, and auto loans to safe deposit box rentals.



The Organization Structure



—Safe Deposit



In 1978, the bank's safe deposit department anticipated a sharp



demand. The safe deposit department is in the lobb\' area and operates under the operations department. It is staffed b\' three customer ser\1ce representati\'es and one security' guard Exhibit 7-1). Although no single indi\idual in the department has been given the official title of super\isor, in practice, one of the employees is in charge. increase in



-Vl



i



Denise Aguiar, the "supervisor," began working in August 1981. Since then she has made sexeral improxements in procedures as we shall discuss later. Dorothx' Gcirrison and Linda Hoppe are the other two safe deposit clerks. They began emploxnient in June 1981 and March 1983, respectively. None of the three women has prior computer experience. Humberto Tamayo joined safe deposit in Januan' 1982 as the vault security guard. The bank currently has 6,195 safe deposit boxes and the capacity' to increase the number to more than 10,000. The safe deposit boxes range in size from 3 by 5 inches to 38 by 21 inches and are rented on an annual contractual basis. E.xhibit 7-2 lists the most recent schedule of senice charges by box size. Although rental charges are fixed, in practice the department must keep track of three fee schedules. First, the safe deposit box lessees whose contracts have not yet expired are charged by the older rental fee schedule. A second schedule holds for some current customers who are unhapp\' with the hefty price increases and ha\e large account balances, borrowings, or utilization of other bank services. These customers are enticed into keeping their bo.xes by \arious discount allowances that are appro\ed by a vice president. Third, the employees are ofi'ered safe deposit boxes at the old fee rates less SIO, making the 3 by 5 box free.



7



EXmBIT



7-1



/



FEASIBIIJTY STUDY



213



Organization Chart



Board of



Directors



Audit



President



± Personnel



Guard Operators



Maintenance



Vice President Trust



Senior Vice President



Vice President Installment Loans



Collector Assistant Cashier



Safe Deposit



Department



Senior Vice President Operations



Loans



Vice President



Vice President



Commercial Loans



Commercial Loans



2nd



2nd



Vice President



Vice President



Vice President



Vice President



Accounting



Bookkeeping



Vice President



2nd Vice President



Vice President Platform



1



Customer



Customer



Customer



Representative (Denlse Aguiar)



Representative (Dorothy Garrison)



Representative (Linda Hoppe)



Guard (Humberto Tamayo)



214



PART



TWO SYSTEMS ANALYSTS /



EXHIBIT 7-2 Box Size (inches)



List of



Old Rental Charge



3X5 5X5 3 5



10 15 13



26 38



X X X X X X X



Rental Charges



10.00



$



New



Rental



Charge $



25.00



25.00



45.00



10



30.00



75.00



10



40.00



100.00



10



70.00



175.00



10



125.00



225.00



21



350.00



350.00



21



600.00



600.00



21



1,000.00



1,000.00



Data Collection



The data



collection process began by examining the safe deposit department's Manual of Instructions and Procedures and sample documents. To gather more information about the department and investigate some questions rfiised, staff members were interviewed at the bank. Denise provided most of the data. A tour of the facility offered a firsthand look at the layout of the vault and lobby area where business is conducted. A systems flowchart of procedures was drawn up based on the Manual of Instructions and Procedures and the rules and regulations booklet (Exhibit 7-3). This helped to clarify the information and indicate where changes might be needed. Any further questions were readily answered by the supervisor or a member of the board of directors who is quite familiar with the bank's operations. There was a good



—



and the project team by Management's encouragement and



deal of communication between the bank



phone, in person, and in writing. enthusiasm for the project were extremely helpful throughout the



feasi-



bility study.



Following data collection, the department's policies and procedures were analyzed by looking at improvements that had already been implemented and identifying existing problem areas. The department has recently instituted several improvements in its operations. For example, a previous problem involved the absence of security measures when the keys were sent to the locksmith for changing the lock after a customer discontinued the box rental. These keys were never recorded and could be missing, causing a potentially large security problem. Denise established a new procedure that required the constant monitoring of the whereabouts of all keys. Another area in which changes have occurred is record-keeping and documentation. In the past, vital documents such as birth and death certificates, court orders, and records on customers and payments were not always readily available. Denise has organized this information and filed it so that it can be obtained more easily.



EXHIBIT 7-3A Customer



Initica Visit Attendant



216



PART



TWO SYSTEMS ANALYSTS



EXHIBIT 7-3B Customer



/



Daily Activity Attendant



Guard and customer insert



own



keys



Customer conducts business



in



private



Customer



,^\



returns box to guard or



attendant



Use guard key and customer / key to unlock and ,



return



box



,



i



7



EXHIBIT 7-3C



Billing



/



FEASIBILITY



STUDY



217



218



PART



TWO SYSTEMS ANALYSTS



EXHroiT 7-3D



'



/



Six-Month Delinquent Rental



'/



.%



7



/



FEASIBILITy



A new problem arose when the department was questioned



regard-



ing a purported loss of cash fix)m a customer's safe deposit box;



spurred



£in



investigation into the procedures of



its



STUDY



which



operations. There



was one instance where a change in a contract's terms regarding the rental of a box was improperly recorded. Consequently, a new procedure was established whereby contract changes are now immediately recorded as a new contract. The old contractual agreement on which the change



is



noted



is



duplicate contract.



filed as a



A



situation that



would be a change in rental by two individuals to a single lessee. Furthermore, a manual of procedures was compiled. As shown in Exhibit 7-4, it specifies and documents the procedural requirements and information necessary for opening new accounts, conducting daily operations, and collecting delinquent rentals. The guidelines improve efficiency and minimize legal liabilities. requires such action, for instance,



The Problem Despite these recent procedural changes, problems still exist for safe deposit that indicate the need for further, more dramatic changes in the current system. The main problems center around the present



memual record-keeping procedures. All filing and record-keeping are done manually by several people. Consequently, documents are easUy lost or misfiled. The enormous volume of paperwoiit generates inefficiency cmd disorganization. Because the department has grown so large and the nature of the manual work is so tedious, the potential for errors is great. As stated by one employee, "the idea of future growth under this system is frightening." Problems uath financial record-keeping also attribute to the manual system, particularly with accuracy in the present billing method. One person is solely responsible for pulling contracts due for billing and for typing up the bills. This, along with manually noting payments on contracts, leaves room for inaccurate reporting and misfiling. One result, for example, is that delinquent accounts sometimes go unbilled. Another area of concern with the present system is incomplete and labor-intensive



inaccurate documentation. This



is



evident in the difficulty of tracing



misplaced documents. Similar documents are not necessarily filed together and standard forms cire not prenumbered. These all contribute to filing problems. Documentation problems were found to stem from the Manual of



no description of which files exist, how they are organized, what is kept where, and how often each file is updated. Second, box prices are somewhat arbitrary. Only one of the four pricing schedules is documented. Third, there are no formal



Instructions



and Procedures.



First,



there



is



job descriptions or recorded assignments of duty.



Related to record-keeping deficiencies are inventory procedures. Neither auditing nor safe deposit knows exactly how^ many boxes there



219



220



PART



TWO SYSTEMS ANALYSTS /



EXHIBIT 7-4



SUMMARY OF CURRENT PROCEDURES Following



an outline of the procedures presently followed by the department, as



is



documented



in the



Manual of Instructions and Procedures.



PROCEDURE FOR OPENING NEW ACCOUNTS Forms



to



be completed upon the opening of a



new account



before the customer



enters the vault: I.



Lease. A.



Necessary identification information to be obtained. 1.



B.



Name.



2.



Firm.



3.



Address.



4.



Phone number.



5.



Hair color.



6.



Eye color.



7.



Height.



8.



Weight.



Lease agreement (contract) the account. A key deposit



on the



II.



is



read and signed by the person(s) opening



made and



the deposit



amount



is



recorded



lease.



additional persons are to have access to the safe desposit box, a deputy



C.



If



D.



must be appointed. This appointment signature of the deputy is needed. Contract filed by box number.



is



noted on the contract and the



Visitation card.



A.



B.



III.



is



Signed upon rental; this original signature is used for comparison purposes during each visit. Signed upon each visit by authorized customer.



compared



1.



Signature



2.



Initialed



3.



Date and time of entrance noted. needed information is obtained, customer



C.



After



D.



Filed



to original signature.



by attendant. is



granted entrance.



by lessee name.



Rental form. A.



Receipt for the



initial rental fee



B.



Receipt for key deposit.



C.



Lessee



is



(payable in advance).



requested to read safe deposit rules and regulations printed on



reverse side.



by box number.



D.



Filed



E.



Lessee receives copy. Transaction entered on daUy balance sheet;



F.



envelope.



all



receipts filed in daily



7



/



FEASIBnJTY STUDY



EXHIBIT 7-4 (continued) I\



.



HistoiA card. A.



B.



Inlbmiation to be recorded: 1.



Box number.



2.



Personisi renting box.



3.



Date rented.



4.



.Attendants



Filed b\ bo.\



initials.



number.



Customer is granted entrance to the \ault: 1. Customer is escorted by safe deposit attendant 11.



III.



I\



.



Customer's keys are tested. Box is checked to ensure it is empt\-. Customer and box are taken to a pri\ ate booth placed in box at this time.



PROCEDURES FOR



D.\IL\



Customer wants access I.



II.



III.



if



to safe deposit box.



personal belongings are to be



WORK



to safe deposit box.



.Attendant pulls customer's \isitation card. .A.



Customer



B.



.Attendant checks signature, initials card,



Customer



signs.



accompanied into .Attendant and customer each is



\ault insert



and



and notes time and



date.



to safe deposit box.



own



ke\'s;



door



is



opened and box



is



remo\ed. I\'.



\



.



\1.



Customer conducts business with box in pri\ate booth. Customer returns box to attendant. Attendant key and customer key are used to unlock door; box door locked.



is



returned and



Inventor%' of contents of safe deposit box. I.



II.



Ill



I\



.



v. \1.



A.



must be authorized by Court order or



B.



Power



In\entor\



of attorney.



.Approval from President,



I.



III.



I\'.



Officer



needed before entrance. Customer is accompanied by officer or safe deposit custodian of the bank. \ isitation card is signed and initialed b\' bank officer and safe deposit custodian and circumstance of entr\ noted. Im entor\ of safe deposit box contents is made. Copy of inventory contents is filed by date.



Customer surrenders II.



\P and Cashier, or \P and Senior Loan



safe deposit box.



Release portion of lease agreement signed.



1.



card notations. Closing date.



2.



Number



Histor\'



of keys returned.



account documents documents. Key deposit returned.



,A11



cire



marked with closing date and



filed



with



inacti\'e



221



222



PART



TWO SYSTEMS ANALYSTS /



EXHIBIT 7-4 (concluded)



BILUNG PROCEDURE Safe deposit attendant



manually determines



for



which accounts



rental fees



are due. II.



Notices mailed. A.



If



fee



is



charged to customer's checking account, an advice of charge



is



created in triplicate.



Copies to a. Customer. b. Accounting department. Contract file. c. 2. Credit noted on daily balance sheet. B. If fee is not charged to customer's account, a rental due notice is mailed to customer at month's end. If rent not received by the end of the month in which it was due, second notice will be mailed. If rent not received within two weeks after second notice, current address must be verified. If rent still not paid, three monthly warning letters are mailed (SD2, SD3, SD4). 1.



III.



IV.



V.



A.



Two



copies typed. Original signed by



VP and Cashier and mciiled to customer. Second copy filed in contract file. If rent is not renewed within three months after expiration of lease term, the safe deposit corporation may deny admission to safe deposit box. If rent is six months delinquent, delinquent procedures are enacted. When rent received, payment noted on daily balance sheet. All cash and daily balance sheet sent to Accounting at end of day; receipts 1.



2.



VI.



VII. VIII. IX.



filed in daily



envelope.



SIX-MONTH DELINQUENT RENTAL PROCEDURE I.



II.



Registered letter mailed to customer's last



known



address, advising that the



box wall be opened and contents stored at renter's expense unless rented payment is made within 30 days. If payment is not received, box is opened in presence of Bank Officer and Notary Public. A. Contents sealed in package. Notary Public executes certificate reciting. B.



C.



1.



Name



2.



Date of



3.



List of contents.



rv.



box opening.



Five copies of certificate of opening.



Included in package holding contents. 2. Last known address of renter. 3. Auditing department. 4. Safe deposit department. Locksmith. 5. Package placed in bank vault; same rent charged as for safe deposit box. If one year elapses and package is not claimed, a public auction is held to sell contents. Proceeds used to pay for rent and expenses. 1.



III.



of renter.



7



/



FEASIBEnr STUDY



Discrepancies exist between the two departments (auditing and Boxes are manually counted. Their numbers do not follow a logical sequence corresponding with locations in the vault. In addition, some of the boxes cannot be matched with a contract, and some contracts are missing altogether. cire.



safe deposit) records.



two important security deficiencies have been identified. First, contracts filed in the vault are not locked up, which means they are accessible to customers in the vault at any time. Second, past-due contracts are filed in the lobby in an unlocked desk that is not fireproof. These conditions jeopardize the interests of both the customer and the Finally,



bank.



summary,



system have been identified in areas such as manual record-keeping and filing procedures, incomplete and inaccurate documentation, and inadequate security. Despite recent procedural and policy changes, a computerized safe deposit tracking and billing system could result in significant improvements. Such a system would provide needed up-todate information, improve accuracy and file organization, and increase security by making errors more readily detectable. With a user's manual and a more specific policy manual, documentation would be complete. In



specific deficiencies with the present



The Alternatives determining feasibility, the first step was to evaluate to what extent cuiTcnt needs can be met and pixDblems solved. A quick search of existing software packages i^vealed specific improvements, including: In



a.



Improved bUling accuracy and



b.



Provision for updated box tracking.



c.



Reduction of record



d.



Elimination of monthly manual check for box occupancy. After various



efficiency.



misfiling.



microcomputers were reviewed,



it



became obvious



an IBM PC would be appropriate. For a relatively low cost, such a system would meet the department's immediate needs, has enough memory capacity for expansion, and is flexible enough to be used for other functions such as word processing, general ledger, payroll, and financial analysis. The system has an excellent reputation for performance and maintenance and could later be networked into a large system. Even though department personnel are completely unfamiliar with computers, the system would not be intimidating and can be installed with limited training. Politically, the IBM PC would be a good choice. The \ice president in charge of accounting had a three-day seminar on the system with a previous employer. His biases could not be overlooked. The first major task undertaken was a search for a software package that is capable of meeting the user's needs, keeping in mind the followthat



ing:



223



224



PAKT



TWO SYSTEMS ANALYSTS /



b.



Automated billing. Box tracking.



c.



Online safe deposit maintenance.



d.



User-friendly documentation



e.



Loading the software on the IBM PC.



a.



and easy



training.



Although one option was to do the programming, it was soon found that time and cost would be prohibitive. After various directories ofr financial software packages were searched, a package was found to fit the overall requirements.



The Package There were three limitations concerning the proposed safe deposit package: a.



b.



c.



There was no provision for a history card file to keep track of the present and previous customers of each box for reference.



The package handles a maximum of 8,000 boxes- on the PC and 32,000 boxes on the XT (hard disk) model. Being less than two years old, the package has flaws such as limited editing capability and poor documentation.



To compensate was solved by



for these dravvl^acks, the history card



setting



up



a



dBASE



II file



on the PC



to



work



file



problem



in



conjunc-



The capacity constraint was settled when it was learned that management does not expect SDC to exceed that limit in box rentals before 1990. In the long run, this would be more cost effective with the PC than underutilizing an XT system. Finally, the vendor assured the bank that all program flaws wdll be eliminated in a forthcoming updated edition. tion udth the software package.



Costs and Benefits



Computerizing safe deposit operations will involve new costs that can be justified by saving one full-time clerk and substantially improving customer service and overall performance. Listed here are the costs



and savings associated



vvdth the



candidate system:



Hardware/software



Hardware



IBM PC with 64K memory Three 64K-byte memory chips



Monochrome Monochrome Epson printer



display



and printer adapter board



display (screen)



—



letter qualitj^



$2,630



490 335



345 1,100



$4,900



7



/



FEASIBILITy



STUDY



Software



DOS



2.0



dBASE



operating system



65



385



II



system



Safe deposit tracking/billing



Maintenance lone-time Supplies disks, paper, I



950



fee)



150



etc.)



250 $1,800



Total costs



$6,700



Direct savings



One



full-time



employee



(salary



+ 25%



Net direct benefits $16,750 - 6,700 = Break-even point 6,700/16,750



benefits)



$16,750



$ 10,050



= 40 percent



or 4.8 months



Assignment a.



undertaken by the project team strengths, weaknesses, pixjcedures used, and expected outcome.



b.



If



Evaluate



the



study



feasibility



—



its



you were doing the study, would you have considered hardware before



software? VVhv? Elaborate.



JEFFERSON CREDIT CENTER This case in



Chapter



4.



is



a continuation of the company's backgiDund presented



In this section,



a preliminary choice



Problem



is



two



made



for



alternative systems are described



and



implementation.



Definition



As described in the fii^t part of the case (see Chapter 4), the current problem in the operations of the Jefferson credit center is inefficient storage and retrieval. In the present file system, both customer inquiries and payment slips are stored in physical paper files under date indexes. Consequently, misfiles and the tertiaiy relevance of the account



number and document



type



make



the search process highly inefficient.



This reduces the credit center's ability to properly respond to customer inquiries.



Goals and Considerations



With the preceding problem in mind, the study was oriented toward (1) locating and evaluating microfilm processing and data storage and retrieval systems capable of meeting the Jefferson credit depart-



225



n 226



PAKT



TWO SYSTEMS ANALYSTS /



ment's needs and



recommending the system



(2)



best suited to the



unique needs and limitations of credit center operations. In the system feasibility study, the following goals were expected be achieved by the candidate system: a.



File control- -All out-of-file



to



or misfiled conditions should be elimi-



nated. b.



Multiple access



— Multiple users should have access to the same



information simultaneously. c.



Labor savings



— Fewer personnel should be able to retrieve more



information in less time, providing greater productivity per employee. (L



Storage capacity



— The



system should be large enough to allow



unlimited expansion. e.



Document in



organization



— Retrieval of documents can be specified



any order regardless of date or order filmed.



—



/



Information revision The system must be capable of accepting additional information via the CRT terminal.



g.



Future files



flexibility



(readers



if



— The system should be capable of adding more



needed) in the event of future



In addition to these goals, each system



grovvlJi.



was evaluated



in light of the



following considerations: a.



Compatibility with the present credit



IBM 3031 and b.



Feasibility of in-house (versus contracting) conversion file



and updat-



records.



Ease of transition, which involves implementation procedures and



employee d.



the



4341.



ing of existing paper c.



management system on



training.



.AffordabUity.



Of the systems evaluated, two top candidates were chosen. Each system is briefly described here.



Kodak Micro imagination System



The Kodak Microimagination System rate areas: filming



is



is



delineated into two sepa-



perf^ormed by the ReUant 800 Microfilmer, and



and retrieval functions are performed by the IMT-150 Intelligent Terminal. The Reliant 800 microfilms checks at the rate of 700 per minute. The machine has reduction capabilities and a film capacity of either two 100-feet rolls of 5.4-mm film or two 215-feet rolls of 2.5-mm film. The unique aspects of the system are its flexibUity and speed. Accessories can be added with ease. The indexing system developed while microfilming the document allows for a retrieval time of less than storage



five



seconds.



:



7



The receives



Reliant 800



program



is



equipped with an



signals



The



and



translates



/



FEASronJTY STUDY



intelligent controller that



them



into operations that suit



can select any four indexing options from 13 available pixjgrams. These indexing choices can be changed as the user's needs change. The second component of the system is basically a microcomputer that has a built-in memory and short-term (temporary) storage that can be erased when not in use. The unit is capable of searching through several varieties of film formats. When the document is brought to screen, the IMT-150 has an automatic image position feature that "locks in" a clear, complete pictui^ on the viewing screen. Once on the vievvdng screen, a print can be obtained in 12 seconds. An aspect of the Kodak system that is of vital importance to Jefferson stores is its easy adaptability and compatibility udth Jefferson's existing mainframe computer. The Computer-Assisted Retrieval (CAR) allows the user to keep the images on inexpensive, easy-to-use microfilm magazines, while the computer data base maintains an index of the location of each miciT)film image. With the CAR, the computer does all the sorting and indexing of randomly filmed documents while the IMT-150 retrieves the document. the indexing needs.



client



CAMMS/ll Microimage System



The second candidate system considered was the CARMS/11 system. The California-based vendor is one of the leading suppliers of rapid-access infomiation-retrieval systems using micrographic and computer technologies. The proposed system is a fully automated, computer-controlled record management system. It is designed to: a.



Eliminate misfiles and out-of-file documents.



b.



Provide instant retrieval of payment and customer inquiries.



c.



Increase productivity by creating instant access to data.



d.



Allow for incremental expansion into other areas vvdthin the son credit center.



When



Jeffer-



the operator initiates a search by depressing a function key,



he/she receives prompts querying as to what functions are to be performed. In addition to system status, the system c£in be used to update, amend, or append information to a file, thus providing the operator vvath complete information whenever it is needed.



Comparative Analysis



The next step



was



and cons of The present system used by Jefferson's credit center is already obsolete. Both systems considered, the Kodak Reliant and the CARMS/11 are completely compatible wdth the IBM 3031. In the case of the Kodak system, a small software package is all in this project



to evaluate the pros



the two candidate systems.



that



is



required to integrate the two systems.



On



the other hand, the



227



228



PAfiT



TWO SYSTEMS ANALYSTS /



CARAIS/ll system would require extensive data base and



file



control



software to control indexing, storage, and retrieval of large amounts of information.



A second



consideration



is



storage requirements. Jefferson's credit



center receives and microfilms between 12 and 25 batches of 250 checks per day. It also receives 725 customer inquiries per week. The proposed '



«l



system must be capable of storing two years of such data. This amounts to 2 million to 3 million documents. The CARMS/11 system, with a storage capacity of 100,000 documents per ultrastrip cassette, would require 20 to 25 cassettes. On the other hand, the Kodak system would require 150 cassettes to store two years of documentation. Related to storage requirements is quick retriexal time. The maximum time for accessing a document should be 15 seconds; 25 seconds if a hard copy is required. This criterion fa\'ors the CARMSll system. With 20 to 25 total storage cassettes, the CARMS/11 access time is between 2 and 12 seconds. The Kodak system, with more than five times as



many film



cassettes,



In addition, the



would require more search time



chance



for misplacing the cassette



for the cassette.



is gi-eatly



increased



with the Kodak system.



A



Both systems are hours per day.



A



document filming and indexing. comparable. FUming and indexing take fi\e to eight



third criterion to consider



is



used in the evaluation is vendor serxice and support. Kodak's vendor is in Lynchburg home of the credit center), whereas the CARiMS/ll dealer operates out of the Washington, D.C., area 140 miles away. A system engineer must be within eas\' reach to remed\' malfunctions and pro\ide an ongoing training program. final criterion



I



—



Cost Comparison



Most of Kodak's cost is for hardware. Jeff^erson would ha\'e to purchase a new microfilmer, two intelligent terminals, some peripheral accessories, and a fairly inexpensi\'e software package isee E.xhibit 7-5). On the other hand, the CARMS/ll system's cost is mainly the software package and its two work stations. Compared to Kodak's software package, which merely pro\ides the interface between the IMT-150 and the IBM 3031, the CARMS/11 software package proxides data base management services, but also redundant operating system services (see Exhibit 7-6).



Development costs present some interesting features. The CARMS/11 system requires o\'er twice the processing and dexelopment costs incurred by the Kodak system. This is best shown by Exhibits 7-7 and 7-8, w^hich represent the processing and development costs for the next two years' business xolume. The increased cost of CARMS/11 can be attributed solely to the ultrastrip conversion. The ultrastrip 's benefits seem to outweigh its rather expensive price tag, however.



7



Kodak Microimagincrtion System



EXHIBIT 7-5 Item



Costs Cost



Reliant 800 Mici-ofilmer



$ 8,600



Intelligent controller



3,025



Imprinter



6,400



Imprinter keyboard



2,550



Patch sensor assembly



1,760



Image mark counter Bench wori^ base



535



Shelf



155



585



Receiving hopper



165



Film unit for inquiries



2,190



Film unit for checks



2,190



Auto-feeder



1,325



Stacker



985



Image marker Two IMT-150 terminals Interface with computer



905 29,570 2,800



Total



$63,740



Development and processing costs of past documents



11,305



Total to be current



EXHIBIT 7-6



$75,045



Purchase Cost System



Two CARMS/ll work



for



C ARMS/ 11 Microimage



$ 38,000



stations



Auto-feeder



1,325



50 Strip removable cartridges



1,000



Software



35,000



Total system price Conversion of present microfilm to ultrastrips Total system and conversion costs



$ 75,325



— two



35,000



yecirs



$110,325



CARMS/ll Developing Costs



EXHIBIT 7-7 Description



Costs



Cost of developing one image microfilm and ultrastrip



0.05/image



1,500,000 checks/year,



3 checks/image



$25,000/year



600 customer inquiriesAveek, 1



inquiry/page



Total microfilm



and



1,440/year ultrastrip



development costs/year



$26,440



/



FEASffirUTY



STUDY



229



230



PART



TWO SYSTEMS ANALYSTS /



EXHIBIT 7-8



Kodak Developing



Costs



1,500,000 checks/year,



20,000 checks/cartridge,



75 cartridges required/year,



two years' worth = 150



cartridges,



$7.00/cartridge



$1,050



600 customer inquiries, 24,000/year,



two cartridges required/year, two years' worth



148



Total



$1,198



comparing the two systems,



necessary to weigh the cost, vendor reputation, nearby service center, and support of the Kodak system against the greater flexibility, speed, and storage capabilities of the CARMS/11 system. Because such a large portion of the credit cenIn



ter's activity



is



it



centers around customer service, speed



and



efficiency are



of prime importance. Consequently, the CARMS/11's ability to increase



u r



*



»,l



was the deciding advantage. Although center in Lynchburg, CARMS's dealer can



the speed of access/retrieval



Kodak operates a



service



provide same-day service as well. Finally, although the CARMS/11 system costs $30,000 more than the Kodak system, no budget constraints were provided. Furthermore, the system's unique attributes justify the additional cost.



Assignment Evaluate the feasibility study.



weak points? What



What were



The do a complete study?



the strong points of the study?



additional information



is



needed



to



Elaborate.



Selected References Andrews,



Wm.



"The Business Systems Proposal." Journal of Systems Management, February 1978, pp. 39-41. Gore, Marvin, and John Stubbe. Elements of Systems Analysis. 3rd ed. Dubuque, Iowa: Wm. C. Brown, 1983, pp. 240-67. Neuschel, Richard F. "Presenting and Selling Systems Recommendations." Journal of Systems Management, March 1982, pp. 5-13. Powers, Michael; Davis Adams; and Harlan D. Mills. Computer Information System Development: Analysis & Design. Cincinnati. South-Western Publisbing, 1984, C.



pp. 120-47.



"A Practiciil Approach to a Project Expectation Document." Computerworld (In-Depth), August 29, 1983, p. 1.



Zells, Lois A.



Chapter



8



Cost/Benefit Analysis



Introduction



Data Analysis Cost/Benefit Analysis



COST AND BENEFIT CATEGORIES



PROCEDURE FOR COST/BENEFIT DETERMINATION Costs and Benefits Identilicotion Classifications of Costs and Benefits Tangible or Intangible Costs and Benefits Direct or Indirect Costs and Benefits Fixed or Variable Costs and Benefits Savings versus Cost Advantages Select Evaluation Method Net Benefit Analysis Present Value Analysis



Net Present Value



Payback Analysis 232



^ ^



At a Glance Data gathering, traditional or structured, is only one part of systems analysis. The next steps are examining the data gathered, assessing the situation, looking at the alternatives, and recommending a solution. The costs and benefits of each alternative guide the selection of the best system for the job. Cost



and



benefits



may be tangible or intangible, direct or indirect, fixed or



variable. Cost estimates also take into consideration hardware, personnel,



and supply costs for final evaluation. Cost/benefit analysis, then, identiand benefits of a given system and categorizes them for analysis. Then a method of evaluation is selected and the results are interpreted for facility,



fies



the costs



The evaluation methods range from the simple net benefit analysis more complex methods such as present value and payback analyses. action.



By the end 1.



2.



to



chapter, you should know: What is involved in data analysis. Cost and benefit categories. of this



3.



How



4.



The various evaluation methods



to identify



and



classify costs



and



benefits.



for cost/benefit analysis.



Break-even analysis Cash- Flow Analysis Interpret Results of the Analysis



and



Final Action



The System Proposal



>-.*?



234



TWO / SYSTEMS ANALYSTS



PAKT



INTRODUCTION In Chapters 5



and



we



discussed various tools analysts use for gathering details about the system under study. Data gathering is only one part of systems analysis, however. The next steps are to examine the data, assess the situation, look at the alternatives, and recommend a candidate system. The costs and benefits of each alternative guide the selection of one alternative over the others. Since this aspect of analysis is so important, it vvdll take



up most



6,



of the chapter.



This chapter discusses approaches to developing design recommendaend user. Each approach has costs and benefits that are compared vvdth those of other approaches before a final recommendation is tions for the



made. The outcome is a system proposal (also called a project proposal) that summarizes the findings of the analysis and states the recommendations for design. By the end of this chatper, you should be able to evaluate how current operations are pert"ormed, the categories of costs and benefits, key methods for cost/benefit analysis, and how a system pix)posal is developed.



DATA ANALYSIS Data analysis



is



System investigation an assessment of current findings. Our interest is



a prerequisite to cost/benefit analysis.



and data gathering lead



how



to



performed,



how



they contribute to achieving the intended goals, and the cost of making improvements. Let us return to our safe deposit scenario (from Chapter 4) to in



determining



efficiently certain steps are



illustrate the point.



The safe deposit department was authorized



to



double



its



capacity from



meet increased demand. Consequently, the number of employees changed from three to five, with one employee



4,000 to 8,000 boxes in an effort to



assigned full-time to bUling. Analysis of the data collected made it obvdous that customers were frequently billed too late, too often, or not at all. Access to customer information or status of vacant boxes was a nightmare. Customer lines were long, and service was jeopardized.



The



representative facts for the safe deposit department are



The system



shown



in



summarizes the operating characteristics of the safe deposit system, such as the volume of work, nature of processes, physical facilities, and personnel. From the analysis, the system design requirements are identified. These features must be incorporated into a candidate system to produce the necessary improvements. The system Figure 8-1



.



requirements



profile



are:



customer



1.



Better



2.



Faster information retrieved.



3.



Quicker notice preparation.



4.



Better billing accuracy.



service.



•



8



FIGUBE 8-1



Representative Facts



/



COST/BENEFIT ANALTSIS



and Candidate System Design



235



Objectives



Objectives (System



Current System Facts



Analysis



What



done?



is



IprocessesJ



Design Requirements)



Open customer account



Better



Assign safe deptosit box



Faster information retrieval



Issue key



Quicker notice prejiaration



customer service



Receive annual rent



How



is



it



done?



(processing detail)



Some



Better billing accuracy



Heaviest activity



Lower processing and ofjerating cost Improved staff eflRciency More consistent billing procedures to



40 boxes ofjened or closed daily Master card file located too far from customer inquiiy station



on Fridays and before



holidays



Too many



eliminate errors



new



steps taken with



cus-



tomers Delay in billing



—



all



manual



Some 80 renewal piayment



notices pre-



pared daily



Cash received given end of each day



to



head



teller at



Poorly designed application forms



Accounting gets daily summaiy Procedure for customer access to boxes is neither documented nor consistent



Who



does



it?



(personnel)



One person handles One (jerson handles



billing (fiill-time)



Better trained personnel



security



Elxperience in



Three persons process customers into



and out of



computer use



for other



applications



safe deposit area



Except for two persons,



rest of staff is



jxxjrly trained



Communication among



stciff is



adequate



Where



is



it



done?



(physical location/



Location allows privacy and security Billing carried out close to



Allocate quiet sp>ace for



customer



counter



information access



facility)



Assessment of processing



Time



to prepare a



renewal notice



is



10



minutes



Time



to process a



customer



is 3-5



minutes 15 jjercent of billing



is



erroneous in



amount, box number, or amount of rent



28 percent of vacant boxes cannot be located on existing books



Frequent notices regarding "to be



renewed" boxes cost $8,000



for



mailing



Employee pwyroU



is



as



hi^



oflBcers in operations area



computer



Provide security measure for



as junior



236



PART



TWO SYSTEMS ANALYSTS



5.



Lower processing and operating



6.



Improved



7.



Consistent billing procedure to eliminate errors.



/



stajff



costs.



efficiency.



To achieve these design objectives, several alternatives must be evaluated; there is seldom just one alternative. The analyst then selects those that are feasible economically, technically, and operationally. The approach may emphasize the introduction of a computerized billing system, replacement of staff, improved billing practices, changes in operating procedures, or a combination of several options. As you can imagine, each approach has its benefits and drawbacks. For example, one alternative is to introduce a computer-based safe desposit tracking and billing system designed to improve billing accuracy and notice preparation and lower processing and operating costs. It would also promote staff efficiency by allowing the existing staff to concentrate on customer service and provide online information on box availability and the like. The drawbacks include laying off the billing clerk who i^cently got married and strong resistance by the majority of the staff to a computerized environment.



Another alternative might be simply to devise a semiautomatic (ferriswheel type) system that organizes master cards and customer records and improves their access. A word processing system might be introduced to speed the preparation of billing notices. The edit feature of word processors would improve the accuracy in billing preparation. If these were the only two alternatives available, which alternative must be selected? An analysis of the costs and benefits of each alternative guides the selection process. Therefore, the analyst needs to be familiar udth the cost and benefit categories and the evaluation methods before a final selection can be made. Details on these topics are given in the next section.



COST/BENEFIT ANALYSIS Cost



and



Benefit Categories



In developing cost estimates for a system,



elements.



Among them



we need



are hardware, personnel,



to consider several cost facility,



operating,



and



supply costs.



purchase or lease of the computer and peripherals (for example, printer, disk drive, tape unit). Determining the actual cost of hardware is generally more difficult when the system is shared by various users than for a dedicated stand-alone system. In some cases, the best way to control for this cost is to treat it as an operating cost. 1.



Hardware costs



2.



Personnel costs include



relate to the actual



EDP



ance, vacation time, sick pay,



and benefits (health insurwell as pay for those involved in



staff salaries



etc.)'



as



developing the system. Costs incurred during the development of a system



8



are one-time costs



and



/



COST/BENEFTT ANALYSIS



Once the system is and maintaining the system become recur-



are labeled developmental costs.



installed, the costs of operating



ring costs. 3.



Facility costs are



expenses incurred



in the preparation of the ph\'sical



where the application or the computer will be in operation. This includes wiring, flooring, acoustics, lighting, and air conditioning. These costs are treated as one-time costs and are incorporated into the overall site



cost estimate of the candidate system.



Operating costs include all costs associated with the day-to-day operation of the system; the amount depends on the number of shifts, the nature of the applications, and the caliber of the operating staff. There are various ways of covering operating costs. One approach is to treat operating costs as overhead. Another approach is to charge each authorized user for the 4.



amount of processing they request irom the system. The amount charged is based on computer time, staff time, and \olume of the output produced. In any Ccise, some accounting is necessar)' to detemiine how operating costs should be handled. Supply costs are variable costs that increase with increased use of paper, ribbons, disks, cind the like. They should be estimated and included



5.



in the overall cost of the system.



A system



is



also expected to provide benefits.



The



first



task



is



to identifv



each benefit and then assign a monetary vcilue to it for costbenefit analysis. Benefits may be tangible and intangible, direct or indirect, as we shall see later.



The two major benefits are improving performance and minimizing the The performance categon' emphasizes improvement in the accuracy of or access to information and easier access to the system bv cost of processing.



—



authorized users. Minimizing costs through an efficient system error control or reduction of staff is a benefit that should be measured and in-



—



cluded in cost/benefit analvsis.



Procedure



for Cost/Benefit



Determination



between expenditure and investment. We spend to get what we need, but we invest to realize a return on the investment. Building a computer-based system is an investment. Costs are incurred throughout its life cycle. Benefits are realized in the form of reduced operating costs, improved corporate image, staff efficiency, or revenues. To what extent benefits outweigh costs is the function of costlienefit analysis. Cost benefit analysis is a procedure that gives a picture of the various costs, benefits, and rules associated with a system. The determination of costs and benefits entails the following steps: There



is



a difference



and



benefits pertaining to a given project.



1.



Identify the costs



2.



Categorize the various costs and benefits for analysis.



237



238



PART



TWO / SYSTEMS ANALYSTS



3.



Select a



4.



Interpret the results of the analysis.



5.



Take action.



X



Costs



method



and



of evaluation.



Benefits Identification



Certain costs



and



benefits are



moi^



than others. For



easily identifiable



example, direct costs, such as the price of a hard disk, are easily identified from company invoice payments or canceled checks. Direct benefits often relate one-to-one to direct costs, especially savings ft om reducing costs in the activity in question. Other direct costs and benefits, however, may not be well defined, since they represent estimated costs or benefits that have



some



uncertainty.



An example



of such costs



is



reserve for



bad



debt.



It is



a



discerned real cost, although its exact amount is not so immediate. A category of costs or benefits that is not easily discernible is opportunity costs and opportunity benefits. These are the costs or benefits forgone by selecting one alternative over another. They do not show in the organization's accounts and therefore ai'e not easy to identify.



M



Classifications of Costs



and



Benefits The next step in cost and benefit determination is to categorize costs and benefits. They may be tangible or intangible, direct or indirect, fixed or variable. Let us review each category.



^-



Tangible or Intangible Costs and



Benefits.



Tangibility refers to



the ease with which costs or benefits can be measured.



An



outlay of cash for



is referred to as a tangible cost. They are usually on the books. The purchase of hai'dware or software, personnel training, and employee salaries are examples of tangible costs. They are readily identified and measured. Costs that are known to exist but whose financial value cannot be accurately measured ai"e referred to as intangible costs. For example, em-



a specific item or activity



shown



as disbursements



ployee morale problems caused by a



image



is



an intangible



cost. In



some



new system



or lowered



cases, intangible costs



company



may be



identify but difficult to measure. For example, the cost of the



easy to



breakdown



of



an online system during banking hours wdll cause the bank to lose deposits and waste human resources. The problem is by how much? In other cases, intangible costs may be difficult even to identify, such as an improvement in customer satisfaction stemming ftx)m a i-eal-time order entry system. Benefits are also classified as tangible or intangible. Like costs, they are



often difficult to specify accurately. Tangible benefits, such as completing



jobs in fewer hours or producing reports with Intangible benefits, such as



more



no



errors, are quantffiable.



customers or an improved coipoBoth tangible and intangible costs and



satisfied



rate image, are not easily quantified.



should be considei-ed in the evaluation process. Management often tends to deal irrationally with intangibles by ignor-



benefits, however,



8



/



COST/BENEFIT ANALYSIS



Tangible and Intangible Costs and a Given Project



FIGURE 8-2



Benefits for



Tangible



Tangible



costs



benefits



Intangible costs



Tangible benefits



minus tangible costs



on intangible benefits



ing them. According to Oxenfeldt, placing a zero value is



wrong.^ Axelrod reinforces this point by suggesting that



and



benefits are ignored, the



different



from



when



outcome



of costs



It



they are included.- Figure 8-2



and



benefits.



considered cost



If



the project



is



quite



a h\pothetical repre-



is



and



intangible costs



and



exaluated on a purely tangible basis,



by a substantial margin:



effective.



On



the other hand,



are included, the total tangible



which makes the all



may be



indicates the degree of uncertaint\' surrounding the estimation



benefits exceed costs



ing



intangible costs



of the e\aluation



sentation of the probabUit}' distribution of tangible benefits.



if



and



if



therefore,



such a project



intangible costs



and



is



benefits



intangible costs exceed the benefits,



project an undesirable inxestment. Furthermore, includ-



costs increases the spread of the distribution



(compared with the



tangible-only distribution) with respect to the e\entual



outcome



of the



project.



Direct or Indirect Costs



and



Benefits.



From



a cost accounting



point of view, costs are handled differently depending on whether they are direct or indirect. Direct costs are those with directly associated in a project.



They



which



a dollar figure can be



are applied directly to the operation.



For example, the purchase of a box of diskettes for S35 is a direct cost because we can associate the diskettes with the dollars expended. Direct



'



A. R. Oxenfeldt, Cost-Benefit Analysis for Executive Decision



Management 2



C.



Making



AMACOM, American



Association, 19791, p. 51.



Warren Axelrod, Computer Productivity (New York: John WUey & Sons,



1982), pp. 61-89.



239



240



PAKT



TWO SYSTEMS ANALYSTS /



can be specifically attributable to a given project. For example, system that can handle 25 percent more transactions per day is a



benefits also



a



new



direct benefit.



Indirect costs are the results of operations that are not directly associ-



ated with a given system or activity. They are often referred to as overhead. system that reduces overhead realizes a savings. If it increases overhead,



A it



incurs an additional cost. Insurance, maintenance, protection of the computer center, heat, light, and air conditioning are all tangible costs, but it is



determine the proportion of each attributable to a specific activity such as a report. They are overhead and are allocated among users according to a formula. Indirect benefits are realized as a by-product of another activity or system. For example, our proposed safe deposit billing system that provides profiles showing vacant boxes by size, location, and price, will help management decide on how much advertising to do for box rental. Information about vacant boxes becomes an indirect benefit of the billing even though it difficult to



is difficult



to specify its value. Direct cind indirect costs



readily identified for tangible costs



Fixed or Variable Costs constant, regardless of are sunk costs.



They



and



and



benefits are



benefits, respectively.



and Benefits. Some costs and benefits are



how well a



are constant



system



is



used. Fi^ed costs (after the



fact)



and do not change. Once encountered,



not recur. Examples are straight-line depreciation of hardware, exempt employee salaries, and insurance. In contrast, variable costs are incurred on a regular (weekly, monthly) basis. They are usually proportional



they



vvdll



work volume and continue as long as the system is in operation. For example, the costs of computer forms vary in proportion to the amount of to



processing or the length of the reports required. Fi^ed benefits are also constant and do not change. An example is a decrease in the number of personnel by 20 percent resulting from the use of a new computer. The benefit of personnel savings may recur every month. Variable benefits, on the other hand, are realized on a regular basis. For example, consider a safe deposit tracking system that saves 20 minutes preparing customer notices compared with the manual system. The amount of time saved varies udth the number of notices produced.



is



Savings versus Cost Advantages. Savings are realized when there some kind of cost advantage. A cost advantage reduces or eliminates



expenditures. So we can say that a true savings reduces or eliminates various costs being incurred. Figure 8-3 is a summary of savings from the



use of a new online teller system. In this installation, $131,870 was saved through a reduction in personnel, handling charges, and proof machine rental. After deducting processing charges of $90,990, the net savings from the online system was $40,880. This is a savings that provides relief from current costs. It is realized specifically as a result of the additional processing costs incurred in the new system.



8



An Example



FIGURE 8-3



of



/



COST/BENEFIT ANALYSIS



Savings That Reduce Current Costs Summary



of Savings



from an Online Teller System



A.



Reduction



in



personnel and payroll: Average Annual Pay (includes 25 percent



N



benefits



Collections teller



1



$12,400



$ 12,400



Savings teller



5



11,610



58,050



Bookkeeper



3



9,940



29,820



Proof operator



1



10,900



Position



Subtotal



10



B.



Reduction



in



handling charges



C.



Reduction



in



proof machine rental:



Previous units



Present units



(4



@



@



13



S4,500) 51,380)



Total



I



10,900



$111,170 6,840



$18,000 4,140



Net savings from rentals



13,860



Total gross savings



$131,870



Less processing charges:



Online



demand



deposit processing



Proof of deposit reporting



Online savings processing Teller



machine



S33,660 27,000 5,100



25,230



rental



Total processing charges



90,990



Net savings/year



S 40,880



There are savings, however, that do not directly reduce existing To illustrate, examine the following case:



costs.



A systems analyst designed an online teller system that requires 14 new terminals. No reduction in personnel is immediately planned. Renovation of the bank lobby and the



teller



cages will be required. The primary benefits are:



2.



time to update accounts and post transactions. Faster access and retrieval of customer account balances.



3.



Availability of additional data for tellers



4.



Reduction of transaction processing errors. Higher employee morale. Capability to absorb 34 percent of additional transactions.



1.



5. 6.



Savings in



tellers'



when needed.



is a case wher« no dollars can be realized as a result of the costs incurred for the new installation. There might be potential savings if additional transactions help another department reduce its personnel. Similarly, management might set a value (in terms of savings) on the improved accuracy of teller activity, on quicker customer service, or on the psychological benefits from installing an online teller system. Given the profit motive,



This



241



apBm



242



PART



TWO SYSTEMS ANALYSTS /



would ultimately be tied to cost reductions. Managesay on how well the benefits can be cost-justified.



savings (or benefits)



ment has the ;



final



Select Evaluation Method When all financial data have been identified and broken down into cost



.



categories, the analyst



tion



methods are



method of evaluation. Several evaluaeach with pros and cons. The common methods



must



available,



select a



are: 1.



Net benefit analysis.



2.



Present value analysis.



3.



Net present value.



4.



Payback analysis.



5.



Break-even



6.



Cash-flow^ analysis.



Net benefit analysis simply involves subtracting toted costs from total benefits. ,It is easy to ceilculate, easy to interpret, and easy to present. The main di;awback is that it does not account for the time value of money and doe^ not discount future cash flow. Figure 8-4



Net Benefit Analysis.



J-'



J.^^k^



cinalysis.



use of net benefit analysis. Cash flow cmiounts are shown for three time periods: Period is the present period, foUowed by two succeeding periods. The negative numbers repi^sent cash outlays. A cursory look at



illustrates the



numbers shows that the net benefit is $550. The time value of money is extremely important in evaluation processes. Let us expleiin what it means. If you were faced with an opportunity that generates $3,000 a yccir, how much would you be wiUing to invest? Obviously, you'd like to invest less than the $3,000. To earn the same money five years fixjm now, the amount of investment would be even less. What is suggested here is that money has a time value. Today's doUar and tomorrow's doUar are not the same. The time lag accounts for the time value of money. The time value of money is usually expressed in the form of interest on the fijnds invested to realize the future value. Assuming compounded the



interest, the



formula



is:



F = FIGURE 8-4



Year



$-1,000



Benefits



Net benefits



+



i)"



Net Benefit Analysis—An Example



Cost/Benefit



Costs



P(l



$-1,000



Year



Year



1



2



Total



$-2,000



$-2,000



$-5,000



650



4,900



5,550



$-1,350



$-2,900



$



550



8



/



COST/BENEFn ANALYSIS



where



F P



Future value of an investment. Present value of the investment. Interest rate per compounding period.



i



Number



n



of vears.



For example, $3,000 invested in Treasury' notes for three years interest would have a value at maturity of:



F = = = Present Value Analysis,



A



difficult to



compare today's



+



$3,000(1



percent



0.10)3



3,000(1.33)



$3,993



in developing long-term projects,



costs with the



full



is



it



often



value of tomorrow's benefits.



As we have seen, the time value of mone\' allows



and other



at 10



for interest rates, inflation,



factors that alter the value of the in\'estment. Furthermore,



certain investments offer benefit periods that vars' with different projects.



Present value analysis controls for these problems by calculating the costs



and



benefits of the system in terms of today's value of the investment



and



then comparing across alternatives.



A



consider in computing present value is a discount rate equivalent to the forgone amount that the money could earn if it were invested in a different piDJect. It is similar to the opportunity cost of the funds being considered for the piDJect. Suppose that $3,000 is to be invested in a micrxjcomputer for our safe deposit tracking system, and the average annual benefit is $1,500 for the four-year life of the system. The investment has to be made today, whereas the benefits are in the future. We compare present values to future values by considering the time value of money to be invested. The amount that we are critical factor to



willing to invest today



is



of a given period (year).



determined by the value of the benefits



The amount



at



the



end



called the present value of the



is



benefit.



(F



To compute the present value, we take the formula for future value P/(l + /)") and solve for the present value (P) as follows:



=



+



(1



So the present value of $1,500 invested the fourth year is:



ir



at



10 perx:ent interest at the



end of



1,500



P = (1



+



1,500



0.101-*



=



$1,027.39



1.61



That



is, if



we



invest $1,027.39 today at 10 percent interest,



we can



expect to



243



244



PAKT



TWO / SYSTEMS ANALYSTS



Present Value Analysis Using 10 Percent



FIGURE 8-5



Rate (Discounted)



Interest



Cumulative Estiinated



Discount



Year



Future Value



Rate*



1



$1,500



2



1,500



3 4



1,500



X X X X



1,500 •



1/[(1



+



t



P =



F/[(l



0.908



Present Valuet



Present Value of Benefits



$1,363.63



$1,363.63



0.826



1^39.67



2,603.30



0.751



1,127.82



3,731.12



0.683



1,027.39



4,758.51



=



l)"]



+



i)" ]



have $1,500 in four years. This calculation can be represented for each year where a benefit is expected. For a four-yccir summary, see Figure 8-5. i.



Net Present Value. The net present viilue is equal to discounted minus discounted costs. Our $3,000 microcomputer investment



benefits



3delds a cumulative benefit of $4,758.51, or a net present gain of $1,758.51.



easy to calculate and accounts for the time value of money. The net present value is expressed as a percentage of the invest-



This value



ment



—



in



is



relatively



our example: 1,758.51



0.55 percent



3,000



Analysis. The payback method is a common measure of the relative time value of a project. It deteimines the time it takes for the accumulated benefits to equal the initial investment. Obviously, the shorter the payback period, the sooner a profit is i^cilized and the more attractive is the investment. The payback method is easy to calculate and allows two or more activities to be ranked. Like the net profit, though, it does not allow for the time value of money. The payback period may be computed by the following formula:



*/.



Payback



Overall cost outlay



iA



y
s i « g E c



0)



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^ >> CO cQ



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CO ""



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CO



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Is S



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o3



B



u o



+ £ + = 2



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J3



o a,



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M



fe,



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CO



CO



CO



s U



P ^ U



01



CO



-S —c Zo



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CO



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eo^ o



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03



CO



u O



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c o o



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a



01



Q)



£ o E in 2 3 c CO C8 1 o 0) C on E o



Q.



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^^



3 >



s c



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'8



a



01 a;



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CS



13



o E



^



00



t3



CO a)



£ « ™ CO



£ o 3 m £



aI I



CS



u



-^



250



PAKT



TWO SYSTEMS ANALYSTS /



FIGURE 8-9



A



Feasibility



Report— An Outline



written feasibility report should include the following:



TITLE PAGE



I.



Defines the



TABLE OF CONTENTS



II.



name



List



of the project



and who



various parts, features,



it is



and



for



exhibits,



showing



page numbers III.



SCOPE



IV.



STATEMENT OF PROBLEM



Present a brief explanation of the system boundaries



Describe current system Describe proposed system Indicate



how proposed



system



will solve the



problem(s)



SUMMARY/ABSTRACT



V.



I



optional



I



Give executive a



summary



of project, high-



lighting benefits



COST/BENEFIT STATEMENT



VI.



List benefits



and



sa\'ings in quantitative



terms



Present dollar savings versus costs



Summarize cost



of



new equipment,



one-time



charges, etc.



Quantify net savings and expected returns



IMPLEMENTATION SCHEDULE Submit implementation plan Specify human resources requirements,



VII.



-



systems and procedures, etc. PERT-CPM or Gantt chart



*j



Include



HARDWARE CONFIGURATION



VIII.



(optional)



Lay out computet- configuration terminal network and



Describe



equipment ICRTs, printers, etc.) communication equipment



List



idata sets, lines, etc.)



CREDITS APPENDIX



IX.



X.



Give credit to those



who



contributed to the project study



Include exhibits, correspondence miscellaneous documentation



on



project,



and



other



explained in Chapter 7, the report is a detailed summary of the investigation that has been carried out. It outlines the options and recommendations. It is presented to management for determining whether a candidate system should be designed. Effective reports follow carefLilly planned formats that management can understand and exaluate without having to read the



document. The content and format of the marized in Figure 8-9.



entire



feasibility report are



sum-



Summary 1.



Data analysis is a prerequisite to cost/benefit analysis. Fi-om the analysis, system design i-equirements ai'e identified and alternative systems evaluated. The analysis of th^ costs and benefits of each alternative guides the selection process. Therefore, a knowledge of cost and benefit categories



and evaluation methods



is



important.



8



2.



In developing cost estimates, facility,



operating,



provide benefits.



monetary value 3.



/



COST/BENEFIT ANALYSIS



we need to consider hardware,



personnel,



and supply costs. In addition, a system is expected to We need to identify each benefit and assign it a



for cost/benefit analysis.



Cost/benefit analysis gives a picture of the vcirious costs, benefits, rules associated udth a.



each alternative system. The procedure



Identifying the costs



and



and



entails:



benefits pertaining to a project.



Categorizing the various costs and benefits for analysis. Selecting a



method



of evaluation.



Interpreting the results of the analysis.



Taking action. Costs and benefits are classified as tangible or intangible, direct or indirect, fixed or variable: Tangible costs: Outlays of cash for cin item or activity. a. b.



Intangible costs:



Those



that have financial values not easily



mea-



sured. c.



Direct costs:



Those where a dollar



figure C£in



be directly associated



with a project. d.



Indirect costs:



The



results of operations not directly associated with



a system or activity. e.



Fi^ed costs: They are constant and do not change



/ When



Variable costs: all



method



They are proportioned



financial data have



been



to



— nonrecurring.



work volume.



identified, the analyst



of evaluation. There are several



methods



must



select a



available:



from



a.



Net benefit analysis: Involves subtracting



b.



Present value analysis: Calculates the costs and benefits of the



benefits. It is easy to calculate, interpret, and present. The main drawback is not accounting for the time value of money and not discounting future cash flows. total costs



total



system in terms of today's value of the investment and then compares. c.



d.



Net present value: Discounted benefits minus discounted costs. It is relatively easy to calculate and accounts for the time value of money. Payback analysis: A common measure of the relative time value of a project. It determines the time it takes for the accumulated benefits to equal the initial investment.



e.



/



It is



easy to calculate and allows the



ranking of two or more activities. Break-even analysis: The point at which the cost of the candidate system and that of the current one are equal. Cash-flow analysis: Keeps track of accumulated costs on a regular basis.



Once the



and revenues



complete, actual results are compared against standards or alternative investments. The decision to adopt an alternative system can be highly subjective, depending on the evaluation of the project



is



251



252



PAST



TWO SYSTEMS ANALYSTS /



analyst's or user's confidence in the estimated cost



and



benefit values



and the magnitude of the investment.



Key Words Net Pay Value Opportunity Cost Payback Analysis Present Value Return Period



Break-even Analysis



Cash-Flow Analysis Cost/Benefit Analysis Direct Cost



Fixed Cost Future Value



Savings



Indirect Cost



Sunk Cost



Intangible Cost



Tangible Cost



Investment Period Net Benefit Analysis



Variable Cost



Review GLuestions 1.



What



cost elements are considered in cost/benefit analysis?



element do you think



is



the most difficult to estimate?



Which



Why?



2.



Define and explain the procedure for cost/benefit determination.



3.



How



easy



is it



to identify the costs



examples of costs that are not 4.



easily identifiable.



a.



Opportunity and sunk costs.



b.



and indirect costs. Fixed and tangible costs. Tangible and intangible benefits Direct



d. "If



tangible costs



and



"Savings are realized



outcome of the evaluawhich they are included." Do



benefits are ignored, the



tion may be quite different from one you agree? Illustrate your answer. 6.



benefits of a system? Give



Distinguish between the foUoudng:



c.



5.



and



when



in



a cost advantage of



some kind



exists."



Elaborate. 7.



How do



8.



What



are the pros



and cons



b.



Payback method. Cash-flow analysis.



c.



Break-even analysis.



a.



9.



net present value and present value analyses differ? Illustrate.



If



of the foUoudng evaluation



methods?



the evaluation methods used in cost/benefit analysis are seemingly



quantitative,



why



are the interpretive phase



and the subsequent



sion phase subjective? Explain. 10.



Briefly describe the essential



elements of a project study report.



deci-



)



8



/



COST/BENEFIT ANALYSIS



Application Problems



Suppose a firm went through a request for proposal, vendor proposals, benchmarking, and the final choice of a system that can be purchased or leased. Under the purchase option: a.



The



b.



The expected



price tag



is



$500,000.



useful



life



is



five years,



and the



salvage value



is



540,000. c.



The vendor allows a trade-in on the user's old hardware of $100,000. The book value is $70,000, and there is a remaining life of one year.



d.



Maintenance service



Under the



is



avcdlable at $8,000



per year.



lease option:



a.



Lease charges are $110,000 per year under a five-year contract.



b.



Lessor's (vendori



c.



There



is



maintenance



fees are $8,000 per year.



no trade-in allowance, although a third party



is



offering



$75,000 for the old equipment. d.



Cost of capital to the user 40 percent.



is



10 percent, and the effective tax rate



is



Assignment Determine the net present



mind



\'alue



applied to the purchase/lease options. Keep in



the following:



a.



The



b.



When



benefits derived from either option are



assumed



to



be equal.



using the net present value method, you are looking for the net



present value of either cash inflows or cash outflows. c.



Show



all



cash inflows and outflows net of their tax



d.



Proceeds from the from the sale.



e.



Tax benefits



/



of the old system are



reduced by the tax on the gain



that result from the deductibility of the service contract, the



lease pavments,



The



s£ile



effect.



effect is a



and depreciation



are taken into account in the analysis.



reduction in the cash outflows related to the expenditures.



Maintenance, lease pa\Tnents, and depreciation are annuities, fixed amounts payable over a period of time.



253



254



PAET



TWO / SYSTEMS ANALYSTS



A medium-sized bank has decided



to



automate



its



trust accounting



service. The \ice president of the trust department requested a cost/



The systems acti\ities. The



benefit analysis of a trust package for possible installation.



analyst



first



re\1e\ved the cost of operating present trust



and three



earned 564,000 in salaries. Inventory and supplies average S400 each year. Trust account statements, asset reviews, and other trust reports are produced on an outdated system at an annual cost of $400. Overhead (air conditioning, lighting, power, and maintenance! average $2,165 a year. The analyst then evaluated three software packages designed for trust work. One package met the user's requirements. The purchase price was $13,980. When implemented, the computerized service will reduce payroll by $10,000 the salarv' of a junior trust officer. Inventory and supplies were priced at $1,900. Overhead was calculated at $2,660 for air conditioning, lighting, power, and maintenance.



vice president



trust officers



—



When all



was gathered, a report was drafted for the vice president. With these facts and figures, he could see the cost of a computerized trxist package. The operation costs of both systems are summarized as follows: the information



Proposed System



Present



554,000



S&4.000



1,900



400



13,980



400



Air conditioning



900



780



Lighting



860



700



Salaries



Inventory and supplies



System charges CKerhead



System



Power



610



400



Maintenance-janitorial



290



285



S72,540



S66,965



Total



In the event the



house



proposed system is implemented, a brokerage department agreed to undeiAvrite 25



that deals with the trust



percent of the system charge, or $3,495 per year. So the actual operations costs to the trust department are $69,045.



Assignment a.



Did the analyst project the correct salary costs for both systems? Explain.



b.



Did the analyst provide the vice president with all the costs for the system? Did he collect all the aosts relating to the present system?



c.



Given the operations costs, can the vice president cost-justify the proposed system? Explain. ft



new



8



/



COST/BENEFIT ANALYSIS



MIS department was contacted one morning manager of the candy bar dixasion. The problem was by the production that the 3-ounce candy bar is sticking to the wrapper. A large percentage of the bars begin to stick to their wrappers after four or five weeks on the grocer's shelf. Consequently, customer complaints have forced a



The systems



analyst of the



supermarket chain to switch to a competitor's brand. After a two-week observation of the mixing and wrapping processes and inspection of the wrapper, it was found that the three-year-old mixing unit overheated after 6.5 hours of operation. This caused a sugar ingredient to react slowly to room temperature three to four weeks after production. The mixing machine has five more years of projected life. The alternatives are to modify the present machine at a cost of $79,000 and to replace it with a new (but more reliable) machine that has been successfully used by a competitor. The new machine costs $150,000 plus $14,000 installation charge. It has no salvage value at the end of the eight years.



The next step was



to



compute the operation



costs of both systems.



In a meeting with his supervisor, the analyst tried to show how the new system would increase sales of the 3-ounce candy bcir eind produce



production that would easily off^set the initial investment in the new machine. The supervisor did not seem impressed. After a lengthy discussion, the analyst was asked to redo the computations and the reliable



analysis.



PROPOSED SYSlTiM Operating costs Salaries (three



employees



$5.40/hour



or $648/week) Total salaries



Fringe benefits



$33,696



(@ 10%)



3,370



Total payroll/year



$37,066



Service fees



12,000



Overhead (additional expenses due to



new



system)



Mcdntenance (three hours/day Insurance Utilities



Total



Total operating costs/year



@



$8.00/hour)



$ 8,736



955 $ 1,140



$10,831



$59,897



255



256



PART



TWO / SYSTEMS ANALYSTS



PRESENT SYSTEM Operating costs Salaries (four



employees



@



$4.50/hour or $720 week) $37,440



Total salaries



Fringe benefits



(@ 10%)



3,744



$41,184



Total payroll/year



Overhead Maintenance



$ 5,824



675



Insurance



1,008



Utilities



7,507



Total



Total operating costs/year



$48,691



Assignment a.



b.



One problem that was pointed out was computing employee wages. What seems to be inaccurate about the salary section in both system? How would you correct the problem? With respect



to the types of costs incurred in operating either system, did



the analyst include



all



relevant costs?



Show where



additional costs should



be included. What other expenses should the report emphasize



(if



any)?



Selected References Axelrod, C. Warren. Computer Productivity.



pp. 61-89. Davis, Wm. Systems Analysis



New



York:



John Wiley



&



Sons, 1982,



and Design: A Structured Approach. Reading, Mass.: Addison-Wesley Publishing, 1983, pp. 313-24. Oxenfeldt, A. R. Cost-Benefit Analysis for E^cecutive Decision Making. AMACOM, American Management Association, New York 1979. Powers, Michael; Davis Adams; and Harlan D. Mills. Computer Information System Development: Analysis & Design. Cincinnati: South-Western Publishing, 1984, pp. 184-213.



Part Three



Systems Design



I.



'.'"•a



)-•:



-'



9 THE PROCESS AND STAGES OF SYSTEMS DESIGN 1



INPUT/OUTPUT



1 1



FILE



AND FORMS DESIGN



ORGANIZATION AND DATA BASE DESIGN



259



Chapter 9



The Process and Stages of Systems



Design



Introduction



The Process



of



Design



LOGICAL AND PHYSICAL DESIGN



Design Methodologies STRUCTURED DESIGN Functional Decomposition



FORM-DRIVEN METHODOLOGY— THE IPO CHARTS HIPO and IPO Charts



STRUCTURED WALKTHROUGH User Involvement



Major Development



Activities



PERSONNEL ALLOCATION 260



.



At a Glance System design



is



a



solution,



system. This important



a "how to" approach to the creation ol a new is composed ol several steps. It provides the



phase



understanding and procedural details necessary tor implementing the system recommended in the feasibility study. Emphasis is on translating the pertormance requirements into design specifications. Design goes through logical and physical stages of development. Logical design reviews the present physical system; prepares input and output specifications; makes edit, security, and control specifications; details the implementortion plan; and prepares a logical design walkthrough. The physical design maps out the details of the physical system, plans the system implementation, devises a test and implementation



any new hardware and software. Structured design methodologies are emphasized for design work. They include structure charts, HIPO and IPO charts, and structured walkthrough. Major development activifies, audit considerations, and processing controls plan,



and



specifies



are also discussed.



By the end of this chapter, you should know: The process of system design. 1



2.



How



3.



Top-down design and



4. 5.



6.



logical design difiers from physical design.



functional decomposition.



Forms-driven methodology. The major development activities in structured design. Audit considerations for system development.



Audit Considerations



PROCESSING CONTROLS AUDIT TRAIL



AND DATA VALIDATION



AND DOCUMENTATION CONTROL



262



PART THREE / SYSTEMS DESIGN



INTRODUCTION The discussion so



us to a pivotal point in the system development life cycle. User requirements have been identified. Information has been gathered to verify the problem and evaluate the existing system. A feasibility study has been conducted to review alternative solutions and provide cost/ benefit justification. The culmination of the study is a proposal summarizing the findings and recommending a candidate system for the user. If the figures and the reasoning behind the candidate system make sense, management authorizes the proposed change. At this point in the systems life cycle, the design phase begins. The design is a solution, a "how to" approach, compared to analysis, a "what is" orientation. It translates the system requirements into ways of operationalizing them. In this chapter, we cover the process and stages of systems design, the tools used to design candidate systems, and the user's input to systems design. It is an overview chapter that outlines what follows. The next five chapters elaborate on various aspects of design input/output and forms design (Chapter 10), file organization and data base design (Chapter 11), system testing and quality assurance (Chapter 12), and system implementation and software maintenance (Chapter 13). far brings



—



THE PROCESS OF DESIGN The design phase focuses on the detailed implementation of the system recommended in the feasibility study. Emphasis is on translating performance specifications into design specifications. The design phase is a transition from a user-oriented document (system proposal) to a document oriented to the programmers or data base personnel.



Logical



and Physical Design



Systems design goes through two phases of development: logical and physical design. As we saw in Chapter 6, a data flow diagram shows the logical flow of a system and defines the boundaries of the system. For a candidate system, it describes the inputs (source), outputs (destination), data bases all in a format that meets the (data stores), and procedures (data flows) user's requirements. When analysts prepare the logical system design, they specify the user needs at a level of detail that virtually determines the information flow into and out of the system and the required data re-



—



sources.



The design covers the



following:



—



1.



Reviews the current physical system umes, ft^quencies, etc.



2.



Prepares output specifications— that is, determines the format, content, and ft-equency of imports, including teiminal specifications and locations.



its



data flows,



file



content, vol-



9



3.



/



THE PROCESS



AND STAGES OF SYSTEMS DESIGN



—



Prepares input specifications format, content, and most of the input functions. This includes determining the flow of the document from the input data source to the actual input location.



4.



and control specifications. This includes specifying the rules for edit correction, backup pixacedures, and the controls that ensure processing and file integrity.



5.



Specifies the implementation plan.



6.



Prepares a logical design walkthrough of the information flow, output,



F*repares edit, security,



input, controls, 7.



and implementation



plan.



Rexiews benefits, costs, target dates, and system constraints.



As an illustration, when a safe deposit tracking system is designed, system specifications include weekly reports, a definition of boxes rented and boxes vacant, and a summary of the activities of the week boxes closed, boxes drUled, and so on. The logical design also specifies output, input, file, and screen layouts. In contrast, procedure specifications show



—



how



data are entered,



duced



how



files



are accessed,



and how reports



are pro-



(see Figure 9-1).



Foflowdng logical design is physical design. This produces the woricing system by defining the design specifications that tell programmers exactly what the candidate system must do. In turn, the programmer writes the necessary programs or modifies the software package that accepts input



FIGURE 9-1



Systems Design Goes through Logical



System specifications



)



»



(



and



Physical Design



Procedure specifications



PROGRAM SOFTWARE



FILES



Master



Data entry/Access communication



INQUIRY File/Update maintenance



Transaction



Backup/Recovery



Donnant



263



264



PART THREE / SYSTEMS DESIGN



from the user, performs the necessciry calculations through the existing file or data base, produces the report on a hard copy or displays it on a screen, and maintains an updated data base at all times. Specifically, physical system design consists of the following steps: 1.



Design the physical system. a.



Specify input/output media.



b.



Design the data base and specify backup procedures. Design physical information flow through the system and a physical design walkthrough.



c.



2.



Plan system implementation. a.



b. 3.



Prepare a conversion schedule and a target date. Determine training procedure, courses, and timetable.



Devise a test and implementation plan and specify any



new hardware/



software. 4.



Update



benefits, costs, conversion date,



financial,



hardware,



and system contraints



(legal,



etc.).



The physical design for our safe deposit illustration is a software package written in Pascal (a programming language). It consists of program steps that accept new box rental infonnation; change the number of boxes available udth every new box rental; print a report by box type, box size, and box location; and store the information in the data base for reference. The analyst instructs the software programmer to have the package display a menu that specifies for the user how to enter a new box rental, produce a report, or display various information on the screen. These and other procedure specifications are tested and implemented as a working model of the candidate system.



DESIGN METHODOLOGIES During the past decade, there has been a growing move to transform the "art" of systems analysis and design into an "engineering-type" discipline. The feeling that there has to be a more clearly defined logical method for developing a system that meets user requirements has led to new techniques and methodologies that fundamentally attempt to do the following:



and programmers.



1.



Improve



2.



Improve documentation and subsequent maintenance and enhance-



pix)ductivity of analysts



ments. 3.



Cut douTi drastically on cost overruns and delays.



4.



Improve communication among the user, grammer.



5.



Standardize the approach to analysis and design.



6.



Simplify design by segmentation.



analyst, designer,



and pro-



9 / THE PBOCESS



Data Flow Diagrram Update Procedxare



FIGURE 9-2



— Sale



AND STAGES OF SYSTEMS DESIGN



Deposit Cxistomer Master File



Box Status/Customer Update



New Box Record



Box



Status/



Customer Master Record



New Box Status/Customer Record



Structured Design



The approach begins with a system specification that identifies inputs and outputs and describes the functional aspects of the system. The system specifications, then are Structured design



used as a basis



is



a data-flow-based methodology.



for the graphic representation



— data flow diagram(DFD) — of



and 9-3). From the DFD, the next step is the definition of the modules and their relationships to one another in a form called a structure chart, using a data dictionary and other the data flows



and processes



(see Figures 9-2



structured tools.



Structured design partitions a program into small, independent



mod-



The are arranged in a hierarchy that approximates a model of the business area and is organized in a top-down manner with the details shown at the bottom. Thus, structured design is an attempt to minimize ules.



FIGURE 9-3



The Structured Design Method structured English decision tree, decision table,



^^^^^^^s System



DFD



specifications



^^W



Data



^B



^^



dictionary



^^B



J



'



Process informa



^^^^^^^§



^^^^^^



265



266



PAET THREE / SYSTEMS DESIGN



Decomposition



FIGURE 9-4



—A Framework Top



level



Second



A



level



Third level



3.3



complexity and make a problem manageable by subdividing it into smaller segments, which is called modularization or decomposition (see Figure 9-4). In this way, structuring minimizes intuitive reasoning and promotes maintainable, provable systems. A design is said to be top-down if it consists of a hierarchy of modules, with each module having a single entry and a single exit subroutine. The primaiy advantages of this design are as follows: 1.



Critical interfaces are tested first.



2.



Eariy versions of the design, though incomplete, are useful



enough



to



resemble the real system. 3.



Structuring the design, per



4.



The procedural



se,



provides control and improves morale.



characteristics define the order that determines pro-



cessing.



So structured design arises from the hierarchical view of the application rather than the procedural view. The top level shows the most important division of work; the lowest level at the bottom shows the details.



Functional Decomposition The documentation tool for structured design ture chart.



elements:



It



is



^



is



the hierarchy or struc-



a graphic tool for representing hierarchy,



and



it



has three



——



9



1.



The module



THE PROCESS



AND STAGES OF SYSTEMS DESIGN



represented by a rectangle with a a contiguous set of statements.



It is



HGURE



/



is



name



(see Figure 9-5).



9-5



A Module



2.



The connection is represented by a vector linking two modules. It usually means one module has called another module. In Figure 9-6, module A Ccdls module B: it also calls module C.



HGURE



9-6



Connection



An Example



A



^^ .^v



k



J



C



B



3.



The couple



represented b\' an arrow with a circular tail. It represents data items mo\ed from one module to another. In Figure 9-7, O, P, and Q are couples. Module A calls B, passing O downward. Likewise, module A calls C, passing P dov\Tiward and receiving Q back. More on coupling is described next.



HGURE



9-7



is



Coupling



An Example



267



oc lU



1



liJ^



u-O



RATETAB^



Verify employee nuiaber before reading the record



2.



>



Verify type of work 2.2.2



^ 3.



C>



(EU



Display special conditions before update



Load file and lookup pay rate 2.2.3



Check for overt iae, holi2.2.4 day pay, etc.



PJR(updated) 5.



Update



P.IR



with rate



Eitcfidcd



Exttnded Dcscripaon



Notti



Module



[



Segnent



Re
v



xi 1



:



d



X5'r I?



-



acceptable I



3



X X



^ ^



it -i--i-



it



X



1



1



1



I



!



E



ait



Irom a diagram («ny on* o* the low n



^ix.s.



:i::|:



1



i.^



accepiabiei



X



"^



I 1



I^



1



1



Alternate path



1



1



1



1



1



II



1



1



II



M



1



l



Key Chicago



160



S>



Fresno



170



[rJ::^



Houston



179



[rj::^



Memphis



190



[r^:^>



Miami



R =



Flight departure time index



Flight description index



Flight #



flight



flight



Pointer



Key



[R5:r>



8:15



gr^gr:-



[B3>



8:55



[b2:==^



10:10



r3:^=»



E3>



11:05



[r?::=-



[r2:>



11:53



[r5::>



[r3>»



flight flight



flight



rS>



Pointer



Relation (association)



Data Location Area Flight



Location



Flight*



Flight description



departure



R



1



179



Memphis



R



2



190



Miami



R 3



170



Houston



R 4



160



Fresno



R



5



147



Chicago



flight



11:53



R 6



169



Houston



flight



8:15



Looking



at inverted-list



flight



flight flight



flight



organization



8:15 8:55



10:10 11:05



diffei-ently,



suppose the passenger



requests infomiation on a Houston flight that departs at 8:15. The DBMS first searches the flight description index for the value of the "Houston flight." It finds R3 and R6. Next it searches the flight departure index for these values. It finds that the R3 value departs at 10:10, but the R6 value



11



/



HLE ORGANIZATION AND DATA BASE DESIGN



departs at 8:15. The record at location R6 in the data location area displayed for follow-up.



can be seen that inverted



It



lists



are best for applications that request



on multiple keys. They are ideal for static and deletions cause expensive pointer updating.



specific data



tions



is



files



because addi-



Direct-Access Organization file organization, records are placed randomly throughout Records need not be in sequence because they are updated directly and revso^itten back in the same location. New records are added at the end of the file or inserted in specific locations based on software commands. Records are accessed by addresses that specify their disk locations. An address is required for locating a record, for linking I'ecords, or for establishing relationships. Addresses are of two types: absolute and relative. An absolute address represents the physical location of the record. It is usually stated in the format of sector/track/record number. For example, 3/14/6 means go to sector 3, track 14 of that sector, and the sixth record of the track. One problem vvath absolute addresses is that they become invalid



In direct-access



the



file.



when



the



around



file



that contains the records



is



relocated on the disk.



One way



use pointers for the updated records. address gives a record location relative to the beginning of the file. There must be fixed-length records for reference. Another way of locating a record is by the number of bytes it is from the beginning of the file this is to



A relative



moved, pointers location of the record remains



(see Figure 11-8). Unlike relative addressing,



if



the



file is



need not be updated, because the relative same regardless of the file location. Each file organization method has advantages and limitations; a summary is given in Figure 11-9. Many applications by their nature are best done sequentially. Payroll is a good example. The system goes through the employee list, extracts the information, and prepares pay slips. There are no lengthy random-access seeks. In contrast, real-time applications where response requirements are measured in seconds are candidates for r£indom-access design. Systems for answering inquiries, booking airlines or the



stadium seats, updating checking or savings accounts in a bank, or interacting with a terminal are examples for random-access design.



DATA BASE DESIGN A decade



ago, data base



Today



is



was unique



to large corporations with



mainframes.



recognized as a standard of MIS and is available for virtually every size of computer. Before the data base concept became operational, users had programs that handled their own data independent of other it



was a conventional



environment with no data integration or sharing of common data across applications. In a data base environment, common data are available and used by several users. Instead of each program (or user) managing its own data, data across applications are



users.



It



file



331



332



PART THREE SYSTEMS DESIGN



FIGURE 11-8



Absolute



and



Relative



Addressing— An Example



My



M\ address



address



Relati\e



is



the 4th house



on left from comer of Oak St.



Record



M\



Relati\e



110 Ludlam Road



is



address is from comer



relati\e



50



\ artis



of



Oak



B\1e



St.



Relati\e



Absolute Address



shared



relati\ e



Address



authorized users with the data base software managing the data as an entit\ .A program now requests data through the data base management system DBMS which determines data sharing isee Figure 11-10'. b\'



.



Objectives of Data Base The general theme behind a data base is to handle information as an integrated whole. There is none of the artificialit\ that is normalh embedded in separate files or applications. .A data base is a collection of interrelated data stored with mininiuni



and



The general objective is ine.xpensixe. and fle.xible for the



etficienth



quick,



redundancy



man\' users quickly to make information access eas\-,



.



to sei^e



user. In data base design, several



specific objecthes are considered:



nGURE



11-9



File



Organization Methods— A



Summary



.Method



Achantages



Di.sachantages



Sequential



Simple to design



Records cannot be added to middle of file



Easy to program \ ariable



and blocked



length



records a\ailable Best use of storage sjjace Inde.xed-sequential



Records can be inserted or updated in middle of file Processing ma\ be carried



Unique



kex-s



required



Processing occasionalK" slow Periodic reorgcinization of



out sequentialJ\ or ran-



file



required



domh' Im^erted



list



Used



in applications request-



ing specific data



multiple



Random



on



ke_\-s



Records can be iAerted or updated in middle of file



Calculating address required



Better control ox'er record



\



location



al-



for processing



ariable-iength records nearh'



impossible to process



II



FIGURE 11-10



Conventional and



Personnel data



/



FILE



ORGANIZATION AND DATA BASE DESIGN



DBMS Environments



Independent



Shared data



data resources (direct access)



(controlled access)



resources



Profit



Profit



sharing application



• Skills data



sharing



Profit



• Profit sharing



application



sharing data



data • Benefits data



Employee



Employee



benefits application



benefits application



Benefits



data



^ DBMS



FILE ENVIRONMENT (No DBMS)



CONVENTIONAL



ENVIRONMENT



Redundant data occupies space and, therefore, is wasteful. If versions of the same data are in different phases of updating, the system often gives conflicting information. A unique aspect of data base design is storing data only once, which controls redundancy and 1.



Controlled redundancy.



improves system performance. Ease of learning and use. A major feature of a user-friendly data base package is how easy it is to learn and use. Related to this point is that a data base can be modified without interfering with established ways of using the 2.



data.



Data independence.



An important



data base objective is changing hardware and storage procedures or adding new data without having to rewrite application programs. The data base should be "tunable" to improve performance without rewriting programs. 3.



More information at low cost. Using, storing, and modifying data at low cost are important. Although hardware prices are falling, software and programming costs ai-e on the rise. This means that programming and software enhancements should be kept simple and easy to update.



4.



5.



Accuracy and



integrity.



The accuracy



and content remain constant. curacies where they occur.



quality



of a data base ensures that data



Integrity controls detect data inac-



333



334



PART THREE / SYSTEMS DESIGN



With multiuser access to a data base, the system must recover quickly after it is down with no loss of transactions. This objective also helps maintain data accuracy and integrity. 6.



Recovery from



failure.



7. Privacy and security. For data to remain private, security' measures must be taken to prevent unauthorized access. Data base security means that data are protected ftxjm various forms of destruction; users must be positively identified and their actions monitored.



Performance. This objective emphasizes response time to inquiries suitable to the use of the data. How satisfactory the response time is depends on the nature of the user-data base dialogue. For example, inquiries regarding airiine seat availability should be handled in a few seconds. On the other extreme, inquiries regarding the total sale of a pi-oduct over the past two weeks may be handled satisfactorily in 50 seconds. 8.



Key Terms be familiar with several terms. Suppose we have a sales status system designed to give the sales activities of each salesperson. Using the basic model in Figure 11-11, we run into four temis: In data base design,



FIGURE 11-11



we need



Conventional



File



to



Environment



Data model



Sales Status System Sales Report



Salesperson 1 Step (item) 1 Step (Item) 2 Total



40.(»



11450 $154 50



Systems



a; 0?



< U



'X'



i/i



uj;



r-



O o



6D



^



.^ 0



C



B E E



0



t«



4)



(U



to



tn



03 ;/l



to



3



»3



tn



>, >i >, t« -t;



X




endent vendors have been successful in training operators and programmers to use the equipment. They generally rebuild used systems after they have been acquired fixim the second user. For stand-cilone s3/^tems, used computers are ideal for users with inhouse expertise who cire located in an area where technical support is adequate, or who are assured of vendor support. Although the biggest drawback to used computers is maintencince, this is readily available from the vendor or independent service firms. Used computers are acquired through dealers or end users. Most dealers cire knowledgeable about the system they sell. The best bargain, howSales in the



buying directly fixim the end user, provided there is a log that verifies the maintencince record of the system. Checking the maintenance log will reveal how reliable the system has been. The buyer must be sure that the seller has clear title to the system. A qualified consultant can help. In conclusion, there are savings fiDm acquiring used systems, and more and more or^cinizations are going that route. Furthermore, it is an excellent way to extend the useful life of the computer. ever, is



THE COMPUTER CONTRACT After a decision has



been made about the equipment or software, the



step in system acquisition



is



fined



to negotiate a contract. Unfortunately, the



typical user does not negotiate. Tlie



assumption



that a contract drafted by not subject to change. To the contrary, every contract is negotiable to some extent. Large users often spend weeks negotiating amenities and terms, using legal counsel or con-



a reputable firm



is



a standard instrument



and



is



is



sultants.



The primary



law^



governing contracts



is



the law of contracts, although



contracts can be influenced by other laws, such as the Uniform Commercial



Code



(UCC).



Under the



law^ of contracts, the



formation of a contract requires



mutual assent (meeting of the minds) and consideration. Performance of a contract is the fulfilling of the duties created by it.



The



Art of Negotiation



Many users enter into contract negotiations at the mercy of the vendor, with Timing is critical. Strategies must be planned and rehearsed. The leverage enjoyed by either party can change little



preparation. Negotiating



is



an



art.^°



during the course of the negotiations. Figure 14-5 iUustrates the negotiation procedure. Part A represents the jxjorly prepared user, outmaneuvered completely throughout the negotiations. Part B shows a relatively informed user, but one who has a sense of urgency. The user's negotiating leverage



*° Lynn Haber, "Negotiations Can SpeD Out Successful Systems," Computerworld, November 21, 1983, p. 22flF.



433



434



PART FOUR / SYSTEM IMPLEMENTATION



FIGURE 14-5



Negotiation Procedures



100% Lessor (vendor) A. Deficient



Lessee (user)



Bid



Award



Conclusion



Award



Conclusion



100%



B.



Fair



Lessor



100%



C.



Good Lessee



Award



drops



Conclusion



to nearly zero as he/she enters the contract-negotiating phase. At this



point, the



\endor recognizes the user's



willing to negotiate in earnest. In part C, the



ing procedui^s



Strategies



and



and



mind and becomes less user is following good negotiat-



state of



retains fair lexerage into the negotiations.



Tactics



Various strategies and tactics are used to control the negotiation process. A key strategv' is to control the environment. The user's 'home field



advantage" allows the user's representati\'e to concentrate on the negotiation process in a familiar setting. Other strategies are the following: 1.



Use the "good guy" and 'bad guy" approach. The consultant is often perceived as the bad guy, the user as the good guy. The consultant is the "shrewd" negotiator, whereas the user is the compromiser.



2.



Be prepared with



3.



Use



trade-offs.



tions.



alternatives at all times.



Rank



less



It is



a give-and-take approach.



important objectives high early in the negotia-



14 /



4.



Be prepared cussed in



to



HAKDWAfiE/SOFTWABE SELECTION



drop some



AND THE COMPUTER CONTRACT



issues. Certain issues



may be



better dis-



later sessions.



Contract Checklist Responsibilities



and Remedies



A computer contract should specify the remedies to the parties in the event of default or nonperformimce. Remedies should begin with a list of responsibilities that both parties have agreed to assume. Next to each vendor obligation are listed the remedies desired by the user in the event of nonperformance. With such provisions, the contract obligates a vendor to deliver onfy equipment that operates according to specifications. There are three major categories of remedies: special remedies, damages, and specific performance. Special remedies are the user's first line of defense. For example, if the vendor fails to meet the delivery date, the user has the right to Ccmcel the deal after a stated notice to the vendor. Or, if the system fails the acceptance test due to deficient capacity, the user may expect the vendor to provide additional power or memory at a specific cost (or



no



cost) within a stated time.



Tliese special remedies provide immediate relief to the user, without litigation.



When



the vendor hesitates to negotiate special remedies, the



user's representative(s)



may be



may demand strict damage remedies. Such damages



actual, consequential, or liquidated. Actual



damages compensate a



party for what it should have received in a contractual bargain. Consequential damages include all other foreseeable losses that result from the breach



amounts greater than actual damages, vendors make every eflFort to limit consequential damages in the contract. liquidated damages establish a fixed amount in advance payable in the event of default. If the vendor fails to meet the delivery date or the installation or acceptance deadline, liquidated damages ai^ a popular remedy. They actually provide the vendor with a negative financial incentive if they do not perform. of a contract. Because they cover



HoElCiwaie.



A good hardware



contract



is



goal-oriented.



It



stipulates



the results to be achieved with the system. Of greater importance is the definition of sj^tem performance in terms of expected functions. The fir^t step in contracting equipment is to identify each component and spell out



the performance criteria that the processor must meet under normal operating conditions. Where possible, it should be written in terms understandable to anyone v^^o reviews the contract at a later date.



Software. A software package is a Ucense to use a proprietary process. It is not truly "sold," since a title is not transferred, so it is more or less a "license for use." The user has the right to use the package but does not have title of ownership. There are several risks inherent in software packages:



435



436



PAST FOUB SYSTEM IMPLEMENTATION



Nonperformance or



1.



failure to



meet



specifications.



One remedy



is



to



provide for termination in the contract. Costs of modification or integration. with modifications for a fee.



2.



The remedy



is



to specily assistance



Bankruptcy of the vendor. The remedy is provision for the user to modtfv the package without penalties, charges, or obUgations.



Delivery and Acceptance. A major problem with contracting is failure of the vendor to deli\ er on schedule.^ ^ A contract should specif the remedies provided for failure to meet the agreed-upon delivery schedule. The section governing acceptance describes the tests that must be met for the equipment to be accepted by the user. A user should also insist on a period of use under normal operating conditions to ensure the system's performance to standards.



Warranties. .Aiticle 2 of the UCC provides three implied warranties by the vendor for goods sold and many lease transactions as well. Essentially, the vendor has title to the goods when sold, the goods are mechantable, and the goods are fit for the purposes they are intended. Because warranties are desirable for customers, vendors include provisions relating to them in agreements, thus suggesting that some warranty is made.



Finances. Contract negotiations involving finances can be summarized by "Let the buyer beware." One of the most difficult contract items to negotiate is the time when pavments begin. Most standard contracts speciK' that pavTnent



commences upon



installation. In rental



arrangements, the



contract should specifv whether rent



is based on a tlat monthly fee or on used per month or shift. In lease an-angements, however, the contract covers an option to buy, when it can be exercised, and if the optin is assignable. Also, it stipulates whether monthly lease pavTnents can be applied toward the purchase price. Since the contract is normally signed before delivery, the prices defined in the contract should be protected. If the vendor requires an escalation clause, the user should be able to cancel the contract in exchange for a penaltv pavment from the vendor as compensation for costs incurred for



the



number



of hours



preparation.



A clause called /brce majeure deals with the suspension of the contract an event beyond the vendor's control. This includes civil disorders, hurricanes, tornadoes, earthquakes, and acts of war. It is interesting to note that nuclear devastation is normally exempted from a force majeure clause. in



Guarantee



of Reliability.



This



is



a statement by the vendor specify-



ing the following: " David Myers, More Seen 14, 1983, p. 23!



gine



2



2.1



purchase engine



2.2 test



engine



Malceboat



3



3.1



assemble



moW



3.2 pour fiberglass



4



Test boat



Prepare owner's manual



5



5.1 write draft



5.2 copyedrt



5 J print



Legend



Engine tested



Design completed, engine ordered



Engine



Prototype



installed



completed



Steering installed



and designing the interior. They are estimated to take 10, 5, and 18 The total (33) is the estimated time for the "design boat" activity. In real-life applications, an allowance for contingencies is provided. This is called slack time. Each project allows beween 5 and 25 f>ercent slack hull,



days, resf>ectively.



time for completion.



Determine the total estimated time for each activity and obtain an agreement to proceed. Figure 15-3 shows the number of days budgeted for each activity and a 20 f>ercent activity contingency toward completion. 3.



4.



Plot activities



on a Gantt



drawn on the Gantt



chart,



and milestones are with emphasis on simplicity and accuracy (see chart. All activities, tasks,



Figure 15-2).



Review and record progress periodical^. "Hie actual amount of time sfjent on each activity is recorded and compiared with the budgeted times. As shown in Figure 15—4, the actual number of days spent on the three tasks in designing the boat is 40 as budgeted. This procedure is applied to the remaining activities of the prototyp>e stage. A summaiy of progress on the 5.



project



is



sent to



management



for follow-up.



451



452



PART FOUE SYSTEM IMPLEMENTATION '



FIGURE 15-3



Budgeted



Activities



—An Exconple Project name: -ci^^^



136



total



Time



Activity



Activity time estimate



/u



/^



J



(



Estimorte



Date



,'



.'7'-



7-5"



Project name: jl^^*^^^_ _ _ _ _ _ _ _ >



A



critical job.



A



critical job



cannot be delayed



without delaying the entire project. "^



>



A



non-critical job. There will be slack time associated with a non-critical job. This symbol is used for all jobs when you choose not to show the critical path.



Slack time for a non-critical job. A job can be delayed up to its total slack time without delaying



>



the project.



A A



>::::::::>



>::::= = = = n U



=



>



>::::::::X



job.



completed job. The uncompleted portion could be critical or non-critical.



> >



0::::::::>



>_ _ _ _ >



completed



V



X



partially



Jobs with no prerequisites. These jobs are scheduled to begin on a specific date, not after the completion of prerequisites. Jobs with no successors. No other jobs name these jobs as prerequisites. The last job in a project normally ends with an X. A project may have multiple finishes.



Source: VisiCorp., VisiSchedule, User Guide, pp. 2-30 and 2-31.



15



however.



It



tions are corrected



software.



The



and



latest



when an



or when. Noncritical tasks



permissible start times. These limita-



management



organization installs project



features listed earlier give



available for planning



PROJECT SCHEDULING AND SOFTWARE



who does what



says nothing about



are given only the earliest



/



an indication of



and controlling systems



flexibility that is



projects. For example, with



almost any package, it is possible to create a hierarchy by breaking the main network into subnetworks so that each activltv is broken into its own network of activities. Gi\'en this flexibilitv', a software package designed for 200 activities could handle as many as 600,000, though at the expense of many hours of nonstop computing.



PROJECT ORGANIZATION We



have explained the major tools used in project planning. After the tasks have been mapped out and the manpower requirements determined, the next step is to decide on the best way to organize manpower. We shall begin by identifying the staffing and appropriate skills for a pixDJect and then suggesting a



management



style



and approach



to



manage and



control the



staff.



The



Project



Team



The term team is used here to mean a group of people with similar skills and sharing a common activity. Some of the questions a project manager may ask are: What comprises the project team? Who should be on it? What skills must they have? For large projects, a project team is staffed by systems analysts, programmers, prime userls), hardware/software suppliers, and even subcontractors. The staff may be retained for the duration of the project.



The skills expected of a project team are the same computer system development projects:



skills



required in



Systems analysis. Detailed system design. Program design. System testing. Conversion.



Cost justification. Planning and estimating. Hardware/software experience. Leading teams.



A project team is



expected to tap the



more members can address



of its



members



so that one or



and suggest



keep the project moving the completion. These skiUs be secured through a plan that identifies team members and specifies



alternative solutions to



may



skills



the issues that face the project



461



462



PAET FOUR / SYSTEM IMPLEMENTATION



team



expected to serve through the maintenance of the new system. Except in unusual situations, team members should not be shared between projects and project managers because of the possibility of priority conflicts. their skills. For larger project, a project



is



Reporting Structure Most people associated with major projects are outside the direct control of the project leader. Ideally, each team member should report directly to the project leader. In practice, how^ever, most team members report to their respective supervisors. This



means



that the project leader has to use special



coordinate a host of persons over whom he/she has no real authority. For this reason, some authors refer to such a position as project manager rather than project leader} skills to



Management



Styles



In discussing project



work performed



management



we need



examine two types of mechanistic and creative tasks. Mecha-



style,



to



system projects: nistic tasks occur primarily during coding, testing, and maintenance, which take up to 80 percent of the system development effort. Managing these tasks is made possible by controlling against predefined standards and formats. Creative tasks, on the other hand, are exemplified by program or system design and devising a test strategy, which involve up to 20 percent of the system development effort but could affect more than 80 percent of the outcomes. Compared to mechanistic tasks, a relatively small staff is needed for creative tasks. They report directly to the manager. With these tasks in mind, a project manager may use democratic, autocratic, or some intermediate management style. The democratic approach aUows subordinates to think on their own and make suggestions on in



is appropriate when the project manager is not sure exactly be done. Yet it could be interpreted as indicative of a weak or inexperienced manager. Other problems with this approach are the likelihood of a slow reaction time and difficulty in expediting woric. In contrast to the democratic approach is the autocratic approach. The basic premise states that democracy is the wrong approach to unique projects. The aspects necessary to a system project should be entrusted to an experienced individual rather than a committee. This approach is more rewarding to individuals, although it is difficult to coordinate and control. The implication of these approaches for project management is that simple mechanistic tasks may be assigned to lower-level staff members with coordination and control by a responsible manager. At the higher staff level.



projects.



what



'



is



It



to



Jeffrey Keen,



1981), p. 217.



Managing System Development (Reading, Mass.: Addison-Wesley Publishing,



15



/



PBOJECT SCHEDULING



AND



SOFTWAfiE



however, innovative people report directly to the project manager, since their work could affect more than 80 percent of the outcome of the project. These suggestions assume a fairly large project where a hierarchy is important for management control. This scheme does not apply to small system projects. A typical small project could be run by the computer manager, a programmer/analyst, and an operator. This means less staff and fewer levels of management, requiring no formal procedures or project control. Unlike in larger projects, each staff member in a smaller project performs several functions. Consequently, small projects tend to be less thorough and more prone to error. Furthermore, there is pyschological pressure on the project manager to make sure the project udll be a success. The excuse of system failure through committee is absent in small projects.



The



Project



Manager



To plan, coordinate, and control the project team's manager is expected to have unique qualities: 1.



Flexibility



2.



Ability to



and



effort,



the project



adaptability to changing situations.



communicate cind persuade people affected by the project as those working on it about changes or enhancements to incorpo-



well as



rate into the plan. 3.



Commitment to planning the system development aspect of the project and ability to minimize the risks when assessing different approaches implementing a



to



project.



4.



Understanding technical problems and design



5.



Understanding the motivations and interests of members of the project staff and the ability to implement ways to improve job satisfaction.



Of



the contributions a project memager can make, maintaining a



all



satisfied staff is the



approach



details.



is



most important



for strong project teeims.



An



effective



match needs. Hundreds of



to look into the vocational needs of the staff and tiy to



what the job offers and how it meets their studies have been published on the subject. They all look at the variables that improve job satisfaction and motivate people to continue w^orking in the job. The variables that have been known to be important to the job



them



writh



satisfaction of



Looking projects



EDP



staff are listed in



at these variables,



means making the



it is



Figure 15-12.



clear that success in



best of project team



interested in their woric, assigning



them worthwhile



managing system



abilities,



getting



them



jobs, recognizing their



spontaneous way, and providing opportunities for them to use their abilities, advance, and develop their careers. These factors become goals that a project manager should try to achieve for each member of the project staff and for the group as a whole. Managing the people who build systems involves more than underefforts in a



463



464



PART FOUR / SYSTEM IMPLEMENTATION



FIGURE 15-12



Variables Considered Important in Job Satisfaction of the



EDP



Staff



Variable



Interpretation



could do something that makes use of



1.



Ability utilization



I



2.



Achievement



The



3.



Acti\atv



I



4.



Advancement



The



5.



Authority



I



6.



Company



policy



job could give



could be busy



all



me



my



abilities



a feeling of accomplishment



the time



would pro\ide an opportunity for advancement people what to do The company would administer its policies fairly



and



job



could



tell



practices 7.



Compensation



8.



Co-workers



My My



9.



pay would compare well with that of other workers co-woricers would be easy to make friends with



could



trv out



some



of



my own



ideas



Creati\it\'



I



10.



Independence



I



11.



Moral values



I



could work alone on the job could do work without feeling that



12.



Recognition



I



could get recognition for the work



13.



Responsibility



14.



Securirv



could make decisions on my outi The job would pro\ide for steady employment



15.



Social service



I



16.



Social status



I



17.



Supervision-human



My



boss would back up his people (with top management)



My



boss would train his people well



it I



is



morally wrong



do



I



could do things for other people could be "somebody" in the community



relations 18.



Supervision-technical



19.



Variety



I



20.



Working conditions



The



could do something different every day job would have good working conditions



Source: Rene \'. Davvis, L. H. Lofquist, and D. J. Weiss. A Theory of Work Adjustment Minnesota Studies in Vocational Rehabilitation, 1968.



la revision),



Standing the methodology or estimating aJgoiithms. It is understanding the people themselves. Their behavior can be moi^ important to a prtjject's success than the correct development methodology. The project manager must be the kingpin in personnel motivation. He/she must build teams of mature people who are motivated and can be trusted to see a project through to completion. This is the essence of project management.



Summary 1.



System projects



fail



for



many



reasons: conflicting objectives, user's lack



management, budget overruns, and changes in user requirements. These problems make it important that projects are properly planned, managed, and implemented.



of involvement, inexperienced project



2.



Pi-oject



management



is



the application of planning, organizing,



Managing projects user participation, and a



control concepts to critical one-of-a kind projects.



requires top



management commitment,



active



long-range plan. 3.



and



In establishing a project, sevefttl steps are considered:



15



/



PROJECT SCHEDULING



AND SOFTWARE



Study the problem to evaluate the scope, degree of change, and cost of late completion.



Specify project responsibilities through a qualified project team.



d.



manager with experience in the functional areas, ability to recognize problems and communicate ideas, and working knowledge of the system improvement process. Establish ground rules and standards for handling projects.



e.



Select the right project, especially



f-



Define the tasks to be done and plan accordingly.



Select a project



C.



4.



A



project



manager plans the



life



if it is



the



first



project for the firm.



cycle of the project



and eliminates



through proper planning. Planning mccms plotting activities against a time ft ame and developing a network based on an analysis of the tasks that must be performed to complete the project. crisis



5.



TWo a.



b.



planning tools are used in project planning: Gantt chart uses horizontal bars to show the duration of actions or tasks. Broken bars are estimated time delays or slack time. A task is a specific job to be performed; a group of tasks make up an activity



that ends in a milestone. Program evaluation and review technique (PERT) uses tasks and events to represent interrelationships of project activities. Each task is limited by an identifiable event that has no duration. The list of tasks and events is networked in a PERT chart. The numbers of the activity lines are the days required between events. When the network is completed, the next step is to determine the critical path—



the longest path through the network.



It



determines the project



completion date. 6.



Project



management software



is



available for virtually every size of



produces a network's critical software packages load on the personal computer; some also have on-screen graphic capabilities. project.



7.



The



It



skills



required of a project team are the



same as those for computer



system development projects. This means that there should be at least one team member qualified to address each issue related to the project. 8.



Two



types of work are performed in systems projects: mechanistic and creative. Mechanistic tasks take up to 80 percent of the system develop-



ment



effort,



development comes. 9.



whereas effort



creative tasks take



up



to 20 percent of



system



but could affect more than 80 percent of the out-



The democratic approach to project management allows subordinates to think on their own and make suggestions, although the drawbacks are slow reaction time and difficulty in expediting work. In contrast, autocratic management is more rewarding to individuals than committees, cilthough it is difficult to coordinate and control.



10 Success in project



management



requires flexibility to changing situa-



465



466



PA2T FODB / SYSTEM IMPLEMENTATION



communicate, and a commitment to planning and understanding technical problems and the moti\'ations of staff members. Of all the contributions a project manager can make, maintaining a satisfied staff is the most important for strong project teams. The project manager must be the kingpin of personnel motivation. This is the essence of project management. tions, the ability to



Key Words Program Exaluation and Review Technique



Activity Critical



Path



I



PERT



I



Menu



Manager Slack Time



Milestone



Task



Precedence Relationship



VisiSchedule



Gantt Chart



Pixjject



Review GLuestions 1.



2.



your own words, why do systems fail? How would one reduce potential failure Ln system development? Explain. In



From vv^hat we have learned about system development and



the analyst-



user interface, how important is the user's involvement for successful system implementation? W hat other factors are important? Be specific. 3.



4.



Define the following terms:



management.



a.



Project



b.



Task.



c.



Milestone.



d.



Critical path.



Distinguish between the following: a.



b. c.



d



Event and milestone. Gantt and PERT.



Task and activity. Precedence and successor relationships.



5.



Discuss the steps for establishing a system project. Which step do you think is the most critical? Why?



6.



What



skills



7.



What



is



fixim a



and



qualifications are required of a project leader? Explain.



a Gantt chart?



PERT



how



How would you



develop one?



How does



it



difiier



chart? Explain.



a task leads to an activity



8.



Explziin



9.



Illustrate the steps taken in



and an



activity to a milestone.



planning a project. What charts or forms are used? What information do they contain?



10.



Think of a problem area where a Gantt chart may be used. and the procedure used in developing the chart.



11.



What information does a PERT chart show? Explain calculating events.



List



the two



the steps



methods



of



15



12.



PROJECT SCHEDULING



Review the computer journals cind report project



how 13.



/



management. Explain



they



briefly



store,



two applications for what each application does and to class



differ.



What is the main function of a members provide? Explain.



14. If you



AND SOFTWARE



project team?



What



skills



should team



were a project manager developing a mailing list for a large retail what management style would you adopt? Why? Justify your



preference. 15.



"A project manager must be the kingpin of personnel motivation." you agree? Discuss in detail.



Do



Application Problems



Bank of Kendall contracted a computer service to instaU an automated teller machine (ATM) in a new shopping plaza five miles away. The computer service that processes checking and savings



The



First National



transactions presented the vice president of operations with a critical



date calendar as



shown



in Exhibit 15-1.



Assignment Prepare a Gantt chart based on the infoimation provided.



A systems project includes designing a stock status routine, followed by writing two programs (A



and



B).



A reorder routine



is eilso



and Each



designed,



two programs (Rl and R2) are to be written at the same time. program is tested after being written. Program Rl is tested only cifter the stock file is generated, which, in turn, must foUow the stock status design. The system as a whole is tested after all programs have been tested.



Assignment a.



Draw a PERT chart and schedule



the required activities around the follow-



ing conditions:



and one week to test. Stock status design takes three weeks and reorder design takes two weeks. The stock file takes four weeks to generate. There are two full-time programmers who test their own programs and are Each program



takes



two weeks



not involved in stock



file



to write



or stock status design.



467



ATM



EXHIBIT 15-1



Critical



Date Calendar



Week



Bank



3/8



3/15



3/22



3/29



1



2



3



4



Live date set



Ad



slicks



(Ccird



obtained



Bank personnel assigned



and forms



OLDS



rep as-



signed



Contract received



Building contractor



and Diebold meet on building



printouts received;



maintenance work begun Work started on validation and disclosure forms



production)



Servicer



name and



name/address



Short



Survey completed



specs



/Maim system planned



Deliver



manuals



Equipment, formproofs, sample plastic ordered



Phone Co. Diebold



Building specs.



Other Burroughs



•



General Data



Comm. Ad agency



EXHIBIT 15--1



(Concluded) Week



Bank



5/17



5/24



5/31



6/7



11



12



13



14



Credit criteria



due



Second card due



edit



Pin



Building com-



and pan con-



tacts assigned



BCF form due



pleted



Autodialer questionnaire



Review



fined



card



is-



sue



Data entry training



Servicer



Second card due



edit



Card tape to vendor Data entry training Order demo, and



First 10



cards pro-



duced and tested



special cards



Phone Co. Diebold



Other Burroughs General Data



Comm. Ad agency



Cards tested



—



4/19



4/12



4/5



4/26



8



(i



Marketing campciign meeting



Plan ad cam-



paign



GIF training



begun Artwork



pi-oofs



GIF clean-up (emphasis



on DDA)



10



Gontinue GIF DDA cleanup



appixjved



Mariceting



campaign



meeting



5/10



5/3



Supplies or-



card edit



First



mainte-



nance begun



card edit



First



dered GIF conver-



produced instructions



given



sion/train-



ing Gircuit



due



GRTs installed



Data set due Mcirketing



campaign



Ad campaign



meeting



6 14



6/21



6/28



7/5



7/12



7/24



15



16



17



18



19



20



Interchange



Supplies due



Ad campaign begins



Cards due



Cards mailed



demo and



ATM



G/L accts.



employees Uniforms and



opened Employee



live to



activity



kickoff



Pins dis-



*



tributed to



*



customers GIF clean-up completed



* * *



*



*



*



* * * *



*



Demonstrators response team balancing



* *



*



*



*



* *



training



ATM



*



*



circuit



due



*



*



*



Atm



installed * * * * * *



ATM



date



set



due



*



*



*



* * * *



470



PART FODK / SYSTEM IMPLEMENTATION



The



total



system takes



1.5



weeks



to test,



which



involves the



two program-



mers.



Remember



that there are



testing activities, stock



What is



file



two design creation,



the critical path duration?



time allotted by the



criticfd



activities,



and a



total



Can the



four program writing



system



and



test.



project be completed within the



path? Elxplain.



Selected References Diamond, Daniel 1983, p.



S. "Project



Management



Via PC." Business Computing,



December



30fF.



Hairell, Clayton Jr.



Computer



"Sure-Handed Project Management, Part



Decisions,



November



I.



Harrison, William D. "For Stronger Project Team: Working the puterworld,



May



Reducing the



Risks."



1983, p. 2608".



Human



Side."



Com-



21, 1984, pp. ID15-16ff.



Justice, Karen. "Systems to



Keep You on Schedule." ICP Interface Administrative and



Accounting, Winter 1983, pp. 25-27ff. Newldrk, Claire. "Project Estimating What's So Tough about



—



It? ICP Software Business Review, December/January 1984, p. 26ff. Potts, Paul. "Project Management: Getting Started." Journal of Systems Management, February 1983, pp. 18-19.



"Project Manager: Technician or Administrator." Journal of Systems Management, January 1982, pp. 36-37. Kerzner, Harold. "Project Management in the Year 2000." Journal of Systems Management, October 1981, pp. 26-31. Rolefson, Jerome F. "Project Management Six Critical Steps." Journal of Systems .



—



Management, Strehlo, Kevin.



April 1978, pp. 10-17.



"When



the Objective



Is Efficient



Project



Management." Personal



Computing, January 1984, p. 132flf. Yasin, Rutrell. "Project Mfmager's Role Is Changing." MIS News, February 34-35.



1,



1984, pp.



.V-. .«',



Chapter



16



Security,



Disaster/Recovery, and Ethics in



System Development



Introduction



System Security DEFINITIONS



THREATS TO SYSTEM SECURITY The Personal Computer and System Risk Analysis



CONTROL MEASURES Identitication Access Controls Encryption Audit Controls System Integrity Recovery/Restart Requirements



System Failures and Recovery



472



K



Integrity



At a Glance Every candidate system must provide built-in features for security and integrity of data. Without safeguards against unauthorized access, fraud, embezzlement, fire, and natural disasters, a system could be so vulnerable as to threaten the survival of the organization. To do an adequate job on security, a systems analyst must analyze the risks, exposure, and costs and specify measures such as passwords and encryption to provide protection. In addition, backup copies of software and recovery restart procedures must be available when needed. A disaster/recovery plan that



has management support should also be prepared. Then no matter what



can recover. The strength behind system integrity and success is ethics and professional standards of behavior. When ethics are compromised, regardless of techthe disaster, the firm



nology, the very fabric of



a system



is



in question.



By the end of this chapter, you should know: a. The various threats to system security and b. c.



How



to



do



risk



analysis



The importance



their defenses.



and



of disaster



specify measures. recovery planning and



how such a plan



initiated. d.



The meaning and importance



of ethics in



Disaster/Recovery Planning



THE PLAN The Team Planning Tasks The Manual Ethics In System



ETHICS



Development



CODES AND STANDARDS OF BEHAVIOR



system development.



is



474



PABT FODB / SYSTEM IMPLEMENTATION



INTRODUCTION when



no longer a question; it is here. Its impact is everywhere, but not without a price. The end user is concerned about security along with increased dependence on the computer. In system development, the project manager and the analyst must consider measures for maintaining data integrity and controlling security at all times. "Hiis invoK'es built-in hardware features, programs, and procedures to pro-



Just



the



computer age



will arriv^e is



systems from unauthorized access. In this chapter, we address the issues of data and system security and suggest some control measures. We also look at ways of planning for and recovering fix»m disasters so that the organization can continue to operate. Underlying the entire system development process is the issue of ethics and ethical standards that govern the beha\ior of analysts, designers, and project managers. Ethics is becoming an important topic in systems analysis and should be addressed at this point. tect candidate



SYSTEM SECURIT7 Newspapers, journals, and television are rife with stories about computer criminals embezzling millions of dollars, "hackers," and kids electronically breaking into computers across the nation. Here are tw^o examples:



A Wells Fargo bank employee embazzled



1.



The employee was the branch and knew^ ex-



$21 million.



jjerforming the entire reconciliation function of actly the operating procedures of the system.*



group of teenager computer enthusiasts computer, a modem, and "home-grown" computer know^ledge. They had broken into more than 60 business and government computers, including those of the Defense Department, the Los Alamos National Laboratory, and the Sloan-Kettering Cancer Center in New York. In July 1983, the FBI caught a



2.



armed with



a personal



computer worid are numerous. As hardware, communication links, and



Points of vulnerability in today's



shown



in Figure 16-1,



they relate to



mcmy



system security, costing companies over $300 million a year. Stealing secrets ftxim computers is more profitable than robbing banks. The average computer theft is $430,000 compcired to $10,000 for a bank holdup or $19,000 for fraud and embezzlement.^ Episodes like the ones cited have made security one of the fastestgrowing areas of concern in the computer industry. An estimated $300 million and $425 million were spent on safeguards in 1982 and 1983, termincils. This explains the



resp>ectively.



'



A



DciUas-based



oil



brecik-ins in



firm invested $500,000 to overhaul



com-



Arnold M. Cohn, Total Information System Security," Journal of System Management,



April 1983, p. 17. 2



its



Ben Harrison, "Planning



for the Worst," Infosystem,



June 1982,



p. 54.



•



hi ^^1—^



Ol



^^^^fc^



vX 1



^Pl



"V\/^ •



jD



o ^ 0>



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tO can



and



to



who



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o>



=



«= " 5 »- « o S " -c I



5



n ss n (D « S «c— «> E a



^B^^



H a> S j£ o o > O o a >.-^ _) «x:x»^ as *-



ao



eg



3 C



6 M >•



I3



cn



U



E Q



•O



"5



O CO D



c Q £



JO ic E-



3



2



a



«



Q



o



u



c



a l-a



a E



O M



r




3 XJ .2 13



E



5



as



ID



£ ^ £



P o



o



a>



M M



c o *^



-P



_o



"



c o



.tS CO



V



D 0)



M D



> o



—eg



br /-



g-l 0)



a a en



o O



T3 -S eg



-



j2



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P.^



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3



£



I 3 O



3 OB



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a a



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a E o (J



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CO



«



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£



^ °' report, 207-8, 506 Feasibility study, 41, 44-45, 200-210,



261-62 definition, 44, 210. 506



considerations. 201-2, 210 steps in, 202-8, 210



Feedback,



14,



Field, 323,



506



506



FUe activity,



323



data, 335 definition, 323, 506



organization, 323-31



methods, 323-32, 350 specifications, 263



form, 263 structure, 322-23 \olatilit>'. 323 File/update maintenance. 263 Fill-in-the blanks question. 144. 150, 506 Fixed benefits, 240 Fixed cost, 240, 506



519



INDEX



520



506



Flat forms, 300, 313,



Flow system models,



Indirect benefits, 240



16, 30,



506



Flowchart, 203, 506 FM; see Facilities management Force majeure, 436, 506



Form action, 296, 313 ballot box, 308-9



classification



continuous



296



of,



strip/fanfold, 301-2, 313



control, 312



conversion, 396 definition, 295-96, 313, 506 design, 295-312, 507



requirements of, 297 flat, 300, 313, 506 formatted, 290-91, 312 instructions, 309-10 layout considerations, 303-12 memory, 296, 313



NCR,



301, 313, 509



Indirect costs, 240, 507 Indirect observation, 136, 507



Information about the firm, 131 about user staff, 131 about work flow, 131 definition, 507 categories of, 21-23, 30-31, 128-31 gathering, 126-51 sources, 131-33, 150 tools, 133-48,



150



origination, 131-33



requirements analysis, 97 Infomiation management system, 176-78 Information system computer-based, 23-28 definition, 20, 30, 507 formal, 21



man-made, 20-21 i-equii-ements, 101-3



report, 296, 313



Initial investigation, 42,



spacing requir-ements, 307-8 types of, 300-302 unit-set/snapout, 300 Forms control, 312, 507 Forms-driven methodology, 270-74 Fortress approach, 490 Functional decomposition, 266-69, 507 Functional structure, 74-75, 507 Functionality, 425, 507



99-116, 507



user's request forni, 99-100



Input definition, 286



design, 286-93, 313



media and



devices, 287-93



Input/output analysis, 112, 508



control system, 335, 508 layout form, 263 specifications, 263



G-H Gantt chart,



16, 18,



Instance, 343



450-53, 465, 507



Hardware evaluation, 427-28



Integritv'



selection, 416



financial considerations in, 430-32



performance



Intangible benefits, 238



Intangible costs, 238, 508 Integration, 12



criteria,



430



suppliers, 416 Help screen, 395



data, 335, 476



system, 476, 479, 485-87, 496 Interaction, 9



Interdependence, 9-12, 508



Hierarchical structuring, 339-40, 350, 507



Hierarchy diagram, 270-74 HIPO, 270-74, 280,' 507 diagram, 271 t€!mplate, 273 worksheet, 271-72 Homeostasis, 507 Human resources information system, 11 I



507 Implementation definition, 388, 507 Identifier-, 343,



types of, 388 IMS; see Infomiation management system Index area, 325 Index paper, 311 Indexed sequential organization, 325-29, 350, 507



Interviewing the art



of,



139



definition, 150, 508



guides



to,



140-42



Interviews, 45, 111, 138



advantages



of,



139



and questionnaires, 138-43 types of, 143-46 structured, 143-46, 513



unstructured, 143, 515 Inverted list organization, 329-31, 508 Investment period, 245, 508 IOCS; see Input/output, contix)l system IPO i;hart, 115, 270-74, 280, 508



K-L



^,



Key, 508 coiTOitenated, 345, 503 primary, 345 Key-to-diskette, 287



INDEX



Kitchen sink strategy, 102, 508 339 Lease option, 431 Ledger paper, 311 Logic error, 36«, 508 Logical design, 262-64 Logical failui-e, 487 Logical record, 323-24, 508 Logical view, 337 Leaf,



M Mijgnetic ink character recognition, 286-87. 508



Net present value, 244, 251, 432, 509 Netwoi-k structuring, 340-41, 350, 509 Normalization, 344 steps in, 344-47, 351, 509 Notation diagram; see Hierarchy diagram NI*V'; see Net pi-esent value



O Obseivation contrived, 136, 503 direct, 136, 505



indirect, 136, 507



methods, 136-37, 150 natuial, 136, 509



reader, 289, 293 Maintainahilitv', 369



obtrusive, 136, 509



Maintenance, 401-6, 430



paiticipant, 136, 510



unohtmsive, 515



adapti\e', 331 c()ri-e!cti\e,



Obtixisive obseivation, 136, 509



402



definition, 403, 508



OCR; see Optical character recognition



management



On-site obseivations, 45, 111, 135-38, 509 methods, 150



pt!rtecti\'e,



audit, 403



402



primary activities, 403-4 pix)grammers, 76 system, 41, 57 Management infomiation, 21, 31 Management information svstem, 21-26 definition, 508 managei", 77 modeling foi', 97-98 oiganization, 73-78, 82 planning, 95-98 strategic [ilanning, 95-97



Management levels, 22-23 Managerial MIS planning, 97 Many-to-manv relationship, 338-39 Mai-k sensing, 288 Mean time hetvveen failure, 405, 437, 508 Memoiy fonn, 296, 313 Menu, 289, 312, 458, 508 MICR; see Magnetic ink character recognition



Milestone, 52, 450, 508 MIS; see Management infoinialion system



Model, 16, 508 dy7iamic system, 16, 18, 505 Modularity, 419, 508-9 Modularization: see Decomposition Module, 267 calling, 269 cohesion, 269 coupling, 269 MTBF; see Mean time between failure Multiple choice question, 144, 150, 509 Mutual backup approach, 490



N Natural observation, 136, 509 NCR fomi, 301, 312, 509



Needs



identification, 99-101 Net benefit analysis, 242-43, 251, 509



objective, 150



pii)blems, 137 C)n(!-to-many relationship, 338



One-to-one relationship, 338



Open-ended questions,



143-44, 509



advantages, 145 drawbacks, 145-46



Open Open



rectangle, 171 system, 18-19, 30, 509 Operating costs. 237 Operating system, 336, 509 Operational infomiation, 21, 31 Operations: see Computer, operations functions Optical bar code, 288 Optical (character recognition, 288 Organization, 8-9, 509 chain, 21, 129-30, 213, 509 direct-access, 331, 350, 505 indexed sequential, 325-29, 350, 507 sequential, 325-26, 350, 512



structure, 129, 212-13



Output,



19,



509



design, 293-95 Overall logical view; see



Schema



Overflow area, 325 Overhead, 240, 509 P Parallel processing, 389,



509



Paraprofessional definition, 509



task categories, 78, 80 Parent, 339



Participant obsenation, 136, 510



Password, 481, 495, 510 Payback analysis, 244-45, 251, 510 Perfective maintenance, 402 PERT; see Program evaluation and review technique



521



522



INDEX



PERT



chart, 16, 18, 30 Phase, 52, 510 Physical design, 263-64, 510 Physical record, 323-24, 510 Physical security, 477, 495 Physical system, 15, 510 Physical view, 337 Pilot testing, 510 Plaintext, 483, 510 Planning, 510 dimensions of, 94-95 Pointer, 275, 327-29, 510 Policy,



Project



management



(continued)



functions, 447



planning tools, 450-56 requirements for, 447-48 software, 456-61 styles, 462-63, 465 Project-oriented structure, 74, 510 Project proposed; see System proposal Prompt, 291-92, 312, 511



Prototype, 450-51 Prototyping, 54-56, 105-6, 108, 511



Punch



card, 287



Purchase option, 431-32



510



Pool-oriented structure, 74-75, 510 Portability, 369, 425, 510 Positive testing, 360



Post-implementation, 41 review, 398-401, 406, 423 activity network for, 399 definition, 399, 510 plan, 399-401 Precendence relationship, 454-55, 510 Present value analysis, 243-44, 251, 510 Primary key, 345 Prime area, 325 Privacy, 334 definition, 476, 510 system, 514 Private cold site, 490 Piivate warm backup site, 490 Problem definition, 108 Procedure specifications, 263 Process, 171-72, 181, 510-11 Processing controls, 278 specification, 263 Processor, 14



Program



objective, 374 Quality factors specifications, 369-70



Question closed, 144, 503



advantages, 146 varieties, 144-46, 150



open-ended, 143-44, 509 advantages, 145 drawbacks, 145-46 Questionnaire, 111, 142-43, 150 construction procedure, 147-48 structured, 143-46 unstructured, 143, 515



R Ranking scales questions,



144, 150, 511 Rating scales questions, 145, 150, 511 Reasonableness check, 278 Recency effect, 103, 511



Record



design, 275-76 logical view, 337 testing,



Quality assurance, 359, 369-71 definition, 511 levels of, 370-71, 374



definition, 511



367-68



logical, 323-24,



Program evaluation and



i"eview technique,



450, 453-56, 459, 461, 465, 511



Recovery/restart requirements, 486-87



Redundancy,



Programming



508



physical, 323-24, 510 333, 511



pool basis, 76



Relation, 341-42, 511



structure, 76, 82



Relational



team



DBMS



basis, 76



features, 342



structuring, 341-43, 350, 511



Project definition, 446



Relative address, 331



directive, 116, 511



Reliability, 111



108-9 manager, 448-49, 463-64 organization, 461-64 planning, 450 scheduling, 444-56 team, 40, 202-3, 461-62 reporting structure, 462 skills, 461-62



of data, 148



initiation,



Project



management,



51, 57, 65,



definition, 447,



464



ft-amework



448-49, 465



for,



S-li"



definition, 148, 150, 511 Reliability-validitv' issue,



148-50



Rental option, 430-31 Report form, 296, 313 Request for proposal, 421-22, 511 Requii'ements analysis, 421



78



Resource sharing, 419 Return period, 245, 512 RFP; see Request for proposal Risk analysis, 479-81, 495



INDEX



Rollback, 4S6, 496, 512



RoUforvvard, 4«6, 496, 512 Rule, 305-6, 512



Run order



schedule, 366



Schema, 337-38, 350-51, 512 Schematic model. 16. 30, 512 Scientific management, steps



in. 62-63 Scoring approach, 429. 438 SDLC: see System de\elopment life cycle Securit>', 334, 472, 495, 511 data, 476. 504 control categories, 495 physical, 477, 495 system, 474-89 definition. 476 threats to. 477-81 Sequence check. 278 Sequential organization, 325-26. 350. 512 Service bureau. 418 Servicer, 418 Simon. Herbert, 27 decision making process, 27-28 Slack time. 451. 460, 512 Snapout form, 300, 313, 512 Software aids. 371-72 applications, 418, 437 attributes. 419 cross-industr\' applications, 419 design specifications, 370 evaluation. 430



industry',



418-20



industn-specific, 419



maintenance. 401-5 modification, 405 packages, 423-24, 435 evaluation process, 427-30



programmer. 76 requirement specifications, 370 selection. 416, 423 criteria for. 424-27, 438 process, 421-23, 437 supplies, 416 system. 418. 437 system audit. 404-5 testing and implementation, 370 types of 418-20 Source document. 286-87, 298 Static system models, 16, 513 Steady state, 19, 513 Strategic information, 21, 30-31 Strategic MIS planning, 95-97. 513 Strategic system planning, 97 Stress testing, 361. 513 String testing, 367-68, 513 Structure chart, 115, 266, 268, 513 elements, 266-69. 280 Structured, definition, 279 Structured analysis



Structured analv'sis continued) attributes, 169-70 definition. 167 Structured design. 265-69, 279 Structured activities. 275-76 Structured English, 167, 181-83, 186-87. 265. 513 Structured interview, 143-46. 513 advantages, 146 drawiiacks, 146 Structured observation. 513 Structured questions, 143-46 Structured tools, 167, 170-86 Structured walkthrough. 263. 274-75. 513 Subschema. 337-38. 350, 513 Subsystem, 10. 513 Sunk costs, 240, 513 SvTitax en-or, 368, 513 Suprasystem: see Environment i



System abstract, 15, 502



acceptance



testing.



276



boundaries, 15 candidate, 502 characteristics 8-12 classifications, 15-28, 30



closed, 19, 30. 503 control. 14



measures, 481-89, 495 513 development, 431, 514 ethics in. 492-95 life cycle, 40-50. 514 documentation, 132, 367-68 elements, 12-15, 20 emplovee-based, 23 enhancement, 48 environment, 14-15 failures. tApes of 487 flowcharts. 203. 514 implementation, 387-88. 485 definition, 8, 30,



inputs. 13 integritv. 476. 479. 485-87, 496,



interface, 15



specifications, 276 maintenance, 41, 48. 57 model. dvTiamic. 16. 18. 505 open 18-19, 30, 509 characteristics of 19-20 operating. 336, 509



outputs. 13 planning. 94-98



top-down approach, 98 privacv. 476. 514



project phases, 51-52 recoverv' restart. reliability',



486-87



479



securitv', 334, 472,



474-89, 495



definition, 476, 514



threats



to,



477-81, 495



specifications, 167, 421. 514



514



523



524



INDEX



Testing (continued)



S\'stem icontinued) study, 40



alpha, 371, 502



support, 22 test preparation, 276



beta, 371. 502



testing, 276, 360,



positi\e. 360



514



System de\elopment



life



program. 364 cycle,



40-50



stress, 361,



513



with protor\ping. 56 with structured analysis. 167-68, 186-87 System proposal, 45, 99, 248, 250 System testing, 366-68, 374 acti\it>' network for, 362-66, 373 performance criteria for, 367. 374 steps in, 367-69 Systema, 7



transaction path, 364 trends in, 371-72 unit. 360, 515 user acceptance. 364 Top-dov%Ti. 266, 280, 514 pi-ogram testing. 366 Tuple, 342. 514



Systems



Turnaround



string, 367-68,



513



time, 367, 515



concept, 7-8



U



definition. 56. 261-62, 279, 513



department manager, 77-78



UCC; see Uniform commercial code



design. 41, 46



implementation, 41. 46-48 definition, 57 management. 78 methodologies, 264-65 models. 16-18 physical. 263-64 process and stages of, 260-80 Systems analysis, 41, 45-46 definition. 56. 502. 514 structure functional structure, 75-76 pool-oriented. 74-75 project-oriented, 74-75



Systems cinal\'st academic qualifications. definition. 62. 82. 514



66,



personal qualifications, 66 relative status, 78-79 role of, 67-72 skill categories, 64-65, 82 specifications, 263 user dififerences, 71-72 user interface, 70-72



82



Unitbrm commercial code, 433 Unit-set forms, 300, 515



Unit testing. 360, 515 Universal product code, 288 Unobtrusi\e intenieu, 143, 515 Unobtrusi\e observation, 136, 515



Unstructured questionnaire, 143, 515 UPC: see Universal product code User acceptance testing, 364, 367-69, 374, 515 friendliness, 277 tr-aining, 364, 392-95, 406 aids, 395-96, 406 elements of 393-94 User's information requirements determination of 101-3 strategies in, 104-6 Users request fomr, 99-100 User's view, 335



V-Z Validation, 371, 374, 422. 515 Validit>, 111-12, 138



definition, 149, ISO, 515



Variable benefits, 240 Variable cost, 240. 251, 515



Tangible benefits, 238 Tangible costs, 238, 514 Task, 51. 450-51, 453, 514 Taylor, Frederick, 62-63 Technical writer. 80, 83, 514 Testing acceptjince, 360



\endor selection, 422-23 approaches to, 428-29 \'isiSchedule, 457-61, 515



Walkthrough; see Structured walkthrough Wami backup ser\ice, 490 Warranties, 436 Zoned form, 304



This book has been set Linotron 202. in 10 and 9 point Zapf Book Light, leaded 2 points. Part numbers are 36 point Lubalin Graph Medium and part titles are 36 point Lubalin Graph Bold. Chapter numbers are 27 point Lubalin Graphic l\^dium and chapter titles are



27 point Lubalin Graph Bold. The size of the type page is 31 by 49 picas.



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