Analysis models - describes how the business will operate if the new system were developed.

The set typically includes models that represent the data and processes necessary to support the underlying business process. Analysis phase- answers the questions of who will use the system, what the system will do, and where and when it will be used. During this phase, the project team investigates any current system(s), identifies improvement opportunities, and develops a concept for the new system. Analysis strategy one of the three strategies of nalysis !hase. is developed to guide the project team"s efforts. #uch a strategy usually includes an analysis of the current system (called the as-is system) and its problems, and of proposed ways to design a new system (called the to-be system). Approval committee- The system request and feasibility analysis are presented to an information systems approval committee (sometimes called a steering committee), which decides whether the project should be underta$en.% The committee reviews the system request and ma$es an initial determination, based on the information provided, of

whether to investigate the proposed project or not. &f so, the ne't step is to conduct a feasibility analysis. Architecture design- This leads to the development of the basic architecture design for the system that describes the hardware, software, and networ$ infrastructure that will be used. &n most cases, the system will add to or change the infrastructure that already e'ists in the organi(ation. The interface design specifies how the users will move through the system (e.g., by navigation methods such as menus and on-screen buttons) and the forms and reports that the system will use. As-is system- n analysis strategy is developed to guide the project team"s efforts. #uch a strategy usually includes an analysis of the current system (called the as-is system) and its problems, and of proposed ways to design a new system (called the to-be system). Break-even analysis- The break-even point (also called the payback method) is defined as the number of years it ta$es a firm to recover its original investment in the project from net cash flows. s shown in )igure *-*+, the project"s

net cash flows ,pay bac$- the initial investment during the fourth year. this is the year in which the cumulative cash flow figure becomes positive. Dividing the difference between that year"s cash flow and its cumulative cash flow by that year"s cash flow determines how far into the year the brea$-even will occur. #ee ppendi' * for the brea$-even calculation. The brea$-even point is easy to calculate and understand and does give an indication of a project"s liquidity or the speed at which the project will generate cash returns. lso, projects that produce higher returns early in the project"s life are thought to be less ris$y, since we can anticipate near-term events with more accuracy than we can long-term events. The brea$-even point does ignore cash flows that occur after the brea$-even point has been reached and therefore is biased against long-term projects. Business analyst- The business analyst focuses on the business issues surrounding the system. This person helps to identify the business value that the system will create, develops ideas for improving the business processes, and helps design new business processes and policies. The business analyst will have business training and e'perience,

plus $nowledge of analysis and design. Business need- business need presents the reasons prompting the project. Business requirements- refer to the business capabilities that the system will need to have, Business value- business value describes the benefits that the organi(ation should e'pect from the system. Cash-flow method/hampion A stakeholder is a person, group, or organi(ation that can affect (or can be affected by) a new system. &n general, the most important sta$eholders in the introduction of a new system are the project champion, system users, and organi(ational management (see )igure *-*0), but systems sometimes affect other sta$eholders as well. )or e'ample, the &# department can be a sta$eholder of a system because &# jobs or roles may be changed significantly after the system"s implementation. 1ne $ey sta$eholder2outside of the champion, users, and management2in 3icrosoft"s project that embedded &nternet 4'plorer as a standard part of 5indows

was the 6.#. Department of 7ustice. The champion is a high-level e'ecutive and is usually, but not always, the project sponsor who created the system request. The champion supports the project by providing time and resources (e.g., money) and by giving political support within the organi(ation by communicating the importance of the system to other organi(ational decision ma$ers. 3ore than one champion is preferable because if the champion leaves the organi(ation, the support could leave as well. Change management analyst- The change management analyst focuses on the people and management issues surrounding the system installation. This person ensures that adequate documentation and support are available to users, provides user training on the new system, and develops strategies to overcome resistance to change. The change management analyst will have significant training and e'perience in organi(ational behavior and specific e'pertise in change management. Compatibility )inally, project teams need to consider the compatibility of the new system with the technology that already e'ists in the organi(ation. #ystems rarely are built

in a vacuum2they are built in organi(ations that have numerous systems already in place. 8ew technology and applications need to be able to integrate with the e'isting environment for many reasons. They may rely on data from e'isting systems, they may produce data that feed other applications, and they may have to use the company"s e'isting communications infrastructure. new /93 system, for e'ample, has little value if it does not use customer data found across the organi(ation in e'isting sales systems, mar$eting applications, and customer service systems. Construction- #ystem construction is the first step. The system is built and tested to ensure that it performs as designed. #ince the cost of fi'ing bugs can be immense, testing is one of the most critical steps in implementation. 3ost organi(ations spend more time and attention on testing than on writing the programs in the first place. Costbenefit analysis- The second element of a feasibility analysis is to perform an economic feasibility analysis (also called a costbenefit analysis) that identifies the financial ris$ associated with the project.

Database and file specifications- These define e'actly what data will be stored and where they will be stored Deliverable- specific documents and files that provide understanding about the project Design phase- The design phase decides how the system will operate in terms of the hardware, software, and networ$ infrastructure that will be in place. the user interface, forms, and reports that will be used. and the specific programs, databases, and files that will be needed. Design strategy- This clarifies whether the system will be developed by the company"s own programmers, whether its development will be outsourced to another firm (usually a consulting firm), or whether the company will buy an e'isting software pac$age. Development costs- Development costs are those tangible e'penses that are incurred during the creation of the system, such as salaries for the project team, hardware and software e'penses, consultant fees, training, and office space and equipment. Development costs are usually thought of as one-time costs. Economic feasibility- The second element of a feasibility analysis is to perform an economic feasibility analysis (also called a costbenefit analysis) that identifies the financial ris$ associated

with the project. This attempts to answer the question ,Should we build the system:- 4conomic feasibility is determined by identifying costs and benefits associated with the system, assigning values to them, and then calculating the cash flow and return on investment for the project. The more e'pensive the project, the more rigorous and detailed the analysis should be. )igure *-; lists the steps to perform a cost<benefit analysis. each step will be described in the upcoming sections. Emerging technology- 3any organi(ations $eep an eye on emerging technology, which is technology that is still being developed and not yet viable for widespread business use. )or e'ample, if companies stay abreast of technology li$e smart cards or radio frequency identification (9)&D) in its earliest stages, they can develop business strategies that leverage the capabilities of these technologies and introduce them into the mar$etplace as a first mover. &deally, companies can ta$e advantage of this first mover position by ma$ing money and continuing to innovate while competitors trail behind. amiliarity with technology- under the feasibility analysis. =ess familiarity generates more ris$. another important source of technical ris$. 5hen a system will use technology that has not been used before within the organization, there is a greater chance that problems will occur and delays will be incurred because of the need to learn how to use the technology. 9is$ increases dramatically when the technology itself is new

amiliarity with the application- =ess familiarity generates more ris$. % 5hen analysts are unfamiliar with the business application area, they have a greater chance of misunderstanding the users or missing opportunities for improvement. The ris$s increase dramatically when the users themselves are less familiar with an application, such as with the development of a system to support a new business innovation (e.g., 3icrosoft starting up a new &nternet dating service). &n general, the development of new systems is ris$ier than e'tensions to an e'isting system, because e'isting systems tend to be better understood. easibility analysis- Feasibility analysis guides the organi(ation in determining whether to proceed with a project. )easibility analysis also identifies the important risks associated with the project that must be addressed if the project is approved. s with the system request, each organi(ation has its own process and format for the feasibility analysis, but most include techniques to assess three areas> technical feasibility, economic feasibility, and organi(ational feasibility. The results of these techniques are combined into a feasibility study deliverable that is given to the approval committee at the end of project initiation. #ee easibility study- ! irst mover- ?usiness needs also can surface when the organi(ation identifies unique

and competitive ways of using &T. 3any organi(ations $eep an eye on emerging technology, which is technology that is still being developed and not yet viable for widespread business use. )or e'ample, if companies stay abreast of technology li$e smart cards or radio frequency identification (9)&D) in its earliest stages, they can develop business strategies that leverage the capabilities of these technologies and introduce them into the mar$etplace as a first mover. &deally, companies can ta$e advantage of this first mover position by ma$ing money and continuing to innovate while competitors trail behind. unctionality

"radual refinement- )or now, there are two important points to understand about the #D=/. )irst, you should get a general sense of the phases and steps that &# projects move through and some of the techniques that produce certain deliverables. #econd, it is important to understand that the #D=/ is a process of gradual refinement. The deliverables produced in the analysis phase provide a general idea of the shape of the new

system. These deliverables are used as input to the design phase, which then refines them to produce a set of deliverables that describes in much more detailed terms e'actly how the system will be built. These deliverables in turn are used in the implementation phase to produce the actual system. 4ach phase refines and elaborates on the wor$ done previously. #mplementation phase- The final phase in the #D=/ is the implementation phase, during which the system is actually built (or purchased, in the case of a pac$aged software design). This is the phase that usually gets the most attention, because for most systems it is the longest and most e'pensive single part of the development process. #nfrastructure analyst- The infrastructure analyst focuses on technical issues surrounding the ways the system will interact with the organi(ation"s technical infrastructure (hardware, software, networ$s, and databases). This person ensures that the new information system conforms to organi(ational standards and helps to identify infrastructure changes that will be needed to support the system. The infrastructure analyst will have significant training and e'perience in networ$ing, database administration, and various hardware and software products.

#nstallation- nstallation is the process by which the old system is turned off and the new one is turned on. &t may include a direct cutover approach (in which the new system immediately replaces the old system), a parallel conversion approach (in which both the old and new systems are operated for a month or two until it is clear that there are no bugs in the new system), or a phased conversion strategy (in which the new system is installed in one part of the organi(ation as an initial trial and then gradually installed in others). 1ne of the most important aspects of conversion is the development of a training plan to teach users how to use the new system and help manage the changes caused by the new system. #ntangible benefits- &ntangible costs and benefits are more difficult to incorporate into the economic feasibility analysis because they are based on intuition and belief rather than on ,hard numbers.- 8onetheless, they should be listed in the spreadsheet along with the tangible items. #ntangible costs#ntangible value- n intangible value results from an intuitive belief that the system provides important, but hard-to-measure, benefits to the organi(ation (e.g., improved customer service, a better competitive position).

#nterface design- The interface design specifies how the users will move through the system (e.g., by navigation methods such as menus and on-screen buttons) and the forms and reports that the system will use. $et present value %$&'(- is used to compare the present value of all cash inflows and outflows for the project in today"s dollar terms. The $ey to understanding present values is to recogni(e that if you had a dollar today, you could invest it and receive some rate of return on your investment. Therefore, a dollar received in the future is worth less than a dollar received today, since you forgo that potential return. ppendi' * shows the present value of a dollar received in the future for different numbers of years and rates of return. &f you have a friend who owes you a dollar today, but instead gives you that dollar in three years2 you"ve been had@ Aiven a *+B rate of return on an investment, you"ll be receiving the equivalent of CD cents in today"s terms. )peration costs)rgani*ational feasibility- one of feasibility analysis+ The final technique used for feasibility analysis is to assess the organizational feasibility of the system> how well the system ultimately will be accepted by its users and incorporated into the ongoing operations of the organi(ation. There are many organi(ational factors that can have an impact on the project, and seasoned

developers $now that organi(ational feasibility can be the most difficult feasibility dimension to assess. &n essence, an organi(ational feasibility analysis attempts to answer the question ,&f we build it, will they come:)rgani*ational management&ayback method- The break-even point (also called the payback method) is defined as the number of years it ta$es a firm to recover its original investment in the project from net cash flows. s shown in )igure *-*+, the project"s net cash flows ,pay bac$- the initial investment during the fourth year. this is the year in which the cumulative cash flow figure becomes positive. Dividing the difference between that year"s cash flow and its cumulative cash flow by that year"s cash flow determines how far into the year the brea$-even will occur. #ee ppendi' * for the brea$even calculation. &hase&lanning phase- The planning phase is the fundamental process of understanding why an information system should be built and determining how the project team will go about building it. &rogram design- which defines the programs that need to be written and e'actly what each program will do.

&ro,ect initiation- the system"s business value to the organi(ation is identified2how will it lower costs or increase revenues: 3ost ideas for new systems come from outside the &# area (from the mar$eting department, accounting department, etc.) in the form of a system request. system re!uest presents a brief summary of a business need, and it e'plains how a system that supports the need will create business value. The &# department wor$s together with the person or department generating the request (called the pro"ect sponsor) to conduct a feasibility analysis. &ro,ect management- During project management, the pro"ect manager creates a work plan, staffs the project, and puts techniques in place to help the project team control and direct the project through the entire #D=/. The deliverable for project management is a pro"ect plan that describes how the project team will go about developing the system &ro,ect manager- ! &ro,ect plan- ! &ro,ect si*e- important consideration, whether measured as the number of people on the development team, the length of time it will ta$e to complete the project, or the number of distinct features in the system. =arger projects present

more ris$, because they are more complicated to manage and because there is a greater chance that some important system requirements will be overloo$ed or misunderstood. The e'tent to which the project is highly integrated with other systems (which is typical of large systems) can cause problems, because comple'ity is increased when many systems must wor$ together. &ro,ect sponsor- The &# department wor$s together with the person or department generating the request % someone who recogni(es the strong business need for a system and has an interest in seeing the system succeed. Ee or she will wor$ throughout the #D=/ to ma$e sure that the project is moving in the right direction from the perspective of the business. The project sponsor serves as the primary point of contact for the system. 6sually, the sponsor of the project is from a business function such as mar$eting, accounting, or finance. however, members of the &T area also can sponsor or cosponsor a project. -equirements gathering- through interviews or questionnaires). The analysis of this information2in conjunction with input from the project sponsor and many other people2leads to the development of a concept for a new system. The system concept is then used as a basis to develop a set of business analysis models that describes how the business will operate if the new system were developed. The set typically includes models that represent the data and

processes necessary to support the underlying business process. .pecial issues- Special issues are included on the document as a catchall category for other information that should be considered in assessing the project. )or e'ample, the project may need to be completed by a specific deadline. !roject teams need to be aware of any special circumstances that could affect the outcome of the system. .takeholder- A stakeholder is a person, group, or organi(ation that can affect (or can be affected by) a new system. .takeholder analysis.teering committee- another term for approval committee+ .tep .trategic alignment- is the fit between the project and business strategy2the
greater the alignment, the less ris$y the project will be, from an organi(ational feasibility perspective. )or e'ample, if the mar$eting department has decided to become more customer focused, then a /93 project that produces integrated customer information would have strong strategic alignment with mar$eting"s goal. 3any &T projects fail when the &T department initiates them, because there is little or no alignment with business-unit or organi(ational strategies.

.upport plan- This plan usually

.ystem proposal- The analyses, system concept, and models are combined into a
document called the system proposal, which is presented to the project sponsor and other $ey decision ma$ers (e.g., members of the approval committee) who will decide whether the project should continue to move forward. The system proposal is the initial deliverable that describes what business requirements the new system should meet. ?ecause it is really the first step in the design of the new system, some e'perts argue that it is inappropriate to use the term analysis as the name for this phase. some argue a better name would be analysis and initial design. ?ecause most organi(ations continue to use the name analysis for this phase, we will use it in this boo$ as well. &t is important to remember, however, that the deliverable from the analysis phase is both an analysis and a high-level initial design for the new system.

.ystem request-

system re!uest presents a brief summary of a business need, and it e'plains how a system that supports the need will create business value. The &# department wor$s together with the person or department generating the request (called the pro"ect sponsor) to conduct a feasibility analysis.% system re!uest is a document that describes the business reasons for building a system and the value that the system is e'pected to provide.

.ystem specification- This collection of deliverables (architecture design, interface

.ystem users-

third important set of sta$eholders is the system users who ultimately will use the system once it has been installed in the organi(ation. Too often, the project team meets with users at the beginning of a project and then disappears until after the system is created. &n this situation, rarely does the final product meet the e'pectations and needs of those who are supposed to use it, because needs change and users become savvier as the project progresses. 6ser participation should be promoted throughout the development process to ma$e sure that the final system will be accepted and used, by getting users actively involved in the development of the system (e.g., performing tas$s, providing feedbac$, and ma$ing decisions).

.ystems analyst- The systems analyst plays a $ey role in information systems
development projects. The systems analyst assists and guides the project team so that the team develops the right system in an effective way. #ystems analysts must understand how to apply technology to solve business problems. &n addition, systems analysts may serve as change agents who identify the organi(ational improvements needed, design systems to implement those changes, and train and motivate others to use the systems.

.ystems development life cycle %.D/C(0angible benefits- #angible benefits include revenue that the system enables the
organi(ation to collect, such as increased sales. &n addition, the system may enable the organi(ation to avoid certain costs, leading to another type of tangible benefit> cost savings. )or e'ample, if the system produces a reduction in needed staff, lower salary costs result. #imilarly, a reduction in required inventory levels due to the new system produces lower inventory costs. &n these e'amples, the reduction in costs is a tangible benefit of the new system.

0angible value- #angible value can be quantified and measured easily (e.g., 0B
reduction in operating costs).

0echnical feasibility- The first technique in the feasibility analysis is to assess the
technical feasibility of the project, the e'tent to which the system can be successfully designed, developed, and installed by the &T group. Technical feasibility analysis is, in essence, a technical risk analysis that strives to answer the question> ,$an we build it:-F

0echnique 0o-be systemn analysis strategy is developed to guide the project team"s efforts. #uch a strategy usually includes an analysis of the current system (called the as-is system) and its problems, and of proposed ways to design a new system (called the to-be system).

0raining plan 1ork plan-