Chapter 3 Research Methodology

3.1 Waterfall Model

Information
Engineering

Analysis Design Coding Testing

Figure 3.1: Basic Waterfall Model

The Figure 3.1(Rosenbat, 1987) illustrates the basic waterfall model, which is

one of the main system development models. In this model, stages were set as a series

of sequential steps with the flow of time and information from left to right. The model

defines the order of stages that will be delivered completely to the management at the

end of each stage. This is a long used traditional model and all the plus points and the

drawbacks have been identified clearly. It is also the most widely used methodology in

the software development industry.

3.1.1 Advance Waterfall Model

The new waterfall model, which is known as the Advance Waterfall Model

have been explained in the Figure 3.2 (Gary, 1999). It allows returning to the previous

stage when the need arises but this provision should be used with care. This advantage

is important in software developments as it is considered a plus point of this model. It is

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undesirable to change the specifications of the previous phases to accommodate new

requirements. However this model does allows this to provide the flexibility to

incorporate important requirements found later in the development process.

Requirement
Analysis

System Design

System
Development

System Testing

Development
Maintenance
System
Implementation

Figure 3.2: Advance Waterfall Model

3.2 Waterfall Implementation

Below are the 5 stages from the waterfall model that will be used in the

development of the new system.

3.2.1 Requirement Analysis

The waterfall model implemented in this research is preceded with the

requirement analysis. In this phase, the requirement of the new system is to be

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identified. All the requirements for the system were gathered with employing

techniques such as questionnaires, interviews and survey.

Interviews are done with the key personals in the agency and from other

agencies to get a clearer idea of the industry and the business activities involved.

Questionnaires are given to their customers and survey is done during their business

process to understand the business needs. All the information will be analysed and all

the functional and non-functional requirements of the new system will be engineered.

The scope of the development efforts will be determined. Developers will

understand what the proposed system means more in the technical way and how it will

be incorporated into the existing business flow. Then the VCA is carried out on the

system’s suggested functions. Both Cost Benefit Analysis (CBA) and the Present Value

Analysis (PVA) models were used to strengthen the VCA.

3.2.2 System Design

This scheduled is followed by the next stage in the waterfall model, which is the

system design phase. In this part, requirements of the project will be translated into

detail design. The dataflow diagram (DFD) will be used to link the whole system with

this specification. As generally known, DFD will provide detailed information

regarding the flow between the information and the tables involved. This will also give

a clearer idea of the tables that is needed.

This is followed by the Normalisation method. All the tables will be created and

normalised to the third level to minimise its dependency and redundancy. Primary and

Foreign Keys in each table will be identified to enhance the database. After identifying

the normalised tables, a complete database for the system will be created. The database

design will be equipped with detailed description of each attribute by field name, data-

type, data validation and description respectively.

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 Next part in the designing will be the Entity Relationship (ER) diagram. The

relationship between every table in the database will be explained in this diagram. The

ER diagram also examines the relation and the dependency of the tables.

Interface design is the final stage in the designing. It is one of the main

components in system design. Only the necessary data should be provided in each page

and confusing labelling should be avoided. All the irrelevant information in a page

should be avoided to reduce mistakes made by the users. Not much graphical notation

is required in this system since most of the users are assumed to be computer literate.

3.2.3 System Development

This is the phase where all the designs will be translated into machine-readable

coding. The coding should be done keeping in mind the future enchancement and the

system reliability.

3.2.4 System Testing and Implementation

The complete software will be also tested based on the functional and non-

functional requirements. Each components of the software will be tested separately to

ensure error free software and component integration.

The testing activity includes the involvement of computer technical people and

customers. The testing log will include information on the program, tested item,

expected action or value and remark criteria. In this research the testing will be done

based on the actual data to know the system’s performance in the real life-working

environment. In this phase the test reports are to be documented carefully.

The system implementation process concentrates on how the developed system

plan to be implemeted in the advertisement agency. A genaral study on how the

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advertisement management system can be implemented in a tipical manual based

malaysian advertisement agency is studied in detail.

3.2.5 Discussion and Conclusion

The effect of the VCA in the system development will be discussed at this stage

of the research. The new system will be reviewed to measure the system’s performance.

The additional and minus points of the system will be disscused at this stage of the

research and future suggestions will be addressed as an input to the next phase.Finally,

the conclusions will be made on the implementation of VCA in system development.

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3.3 Justification of Methodology Selection

The methodology selection brings many benefits towards the final delivery of

the proposed system. The selected methodology incorporates systematic development

technique to the project. This approach will create a more scalable system as it models

the real world via abstraction.

The selection of Waterfall Model (WM) will encourage planning before

designing and enforces some important rules in the process of developing the proposed

system. It breaks the system into sub components with milestones corresponding to the

completion of intermediate products. Since the WM is a discipline approach, it requires

each stage of the software development to be documented. Besides that, the correctness

of the product is checked on each stage of the product building. This ensures only the

correct product that fulfils the users requirement are build during the whole

development process.

Any mistakes can be rectified easier since all the activities will be documented

at each stage completely. The quality of the product at each stage can be identified and

maintained to meet the requirements.

The specification, design, printed code and other documentations such as the

user manual are essential tools for maintaining the system .As this will be a booking

management system and need to be error free, more time was spent to design the

system at each stage and communicate with the people from the agency. The WM is a

disciplined approach allowing each stage to be completed before moving forward.

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 The maintainability of the system have also been simplified since there will be

an administrative for important tables where the critical information will be stored. This

will simplify the whole process of managing the tables.

Another main reason for choosing WM is that it is a stable and reliable model.

As it is widely used in the industry for a long time its reliability is tested and proved.

The developers are also familiar with this model, as it is classic and popular. Due to the

limited time in the software development process, using a stable and familiar model

ensures reduced misunderstanding and problems in the system.

3.3.1 Customer’s Point of View

Besides that, from the customer’s point of view, they have very little experience

in the new advertising industry such as television and printed media industry. This

causes them to provide little information about the working flows in these industries.

Thus, they have arranged few key persons from other agencies to be interviewed to

understand more about these advertising options. This is because the understanding on

an industry is important to cater the needs of the research.

Therefore, the key personnel’s will be present for the interview only once and

all the necessary information needed have to be collected during the meeting. This is

the main reason that limits option in choosing the process model and approach of the

program. Since the usage of complex methodologies such as the spiral model and the

prototyping method will need the participation of the outside key persons more

frequently, it is more appropriate to commence the AWM.

The usage of the AWM need the users participation only once in the

requirement gathering. Once in the stage of finishing the project, the advertising agency

that the research is being studied on will gain more experience due to the time duration

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taken to complete the whole project. Therefore, they will be able to use it and give their

feedback. They will also be able to test it and check the reliability and accuracy of the

system.

3.4 Cost Benefit Analysis

3.4.1 Profit Factor

This part of the research is a continuation work done based on the key

calculation formula (Ward and Peppered, 2004) used in the VCA which have been

explained earlier in chapter 2 (section 2.9). A sample calculation is included as an

example to allow better undestanding on the explained formulars.

Value added (V) - cost (C) = profit (P)

V- Value added by the improved methods (system in this

research)
C- The total cost occur to develop or apply the better method
(implementation of new system)
P- The measurable significant profit from the new method (new
system)

Figure 3.3: The Calculation Formula of Value Chain Analysis

The formula in Figure 3.3 appears to be an easy looking calculation at a glance.

But to evaluate and estimate the exact cost of their respective value it is a complex task.

Analysing the situation, the Cost benefit Analysis (CBA) is used in this research to

compute profit (P) from the system to the agency based on the cost and the values

added by the system. The CBA’s definitions and the working method in this system

development have been explained further in sections below.

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3.4.2 Cost Benefit Analysis

The simple explanation of the CBA (Guan, 2002) will be evaluated

quantitatively whether to follow a course of an action. It is also an intensely creative

tool, in generating solutions to a rigorous problem. Where most of the other methods

stop in deriving the solution, the solution may still not be worth implementing, as it

may invest a lot of time and money in solving a problem that is not worthy of this

effort. But CBA evaluates the worthiness of the solution from the cost recovery factor.

CBA is a widely used technique in deciding whether to make a change. It is an

effective method that rather than a simple tool to be used. As its name sounds, the basic

arithmetic of the tool is the sum of value of the benefits of a course of action (benefits

from the new system in this research), and deducts the associated cost.

CBA = Total Benefit – Total Cost

Figure 3.4: The Cost Benefit Analysis Formula

3.4.3 Tangible Cost

The costs in the system development are estimated and normally divided into

two main parts. The one-off and ongoing maintenance cost, especially in a computer

system. The one-off cost refers to the system development cost that includes the

hardware cost, software cost, development cost, stationary and other cost.

1. Hardware Cost

- The hardware’s where the new system will be implemented. Since the agency

operates based on a file-based system, purchasing new hardware is essential. A

suitable computer configuration will be decided based on the system’s need.

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2. Software Cost

- The total cost of the software will be purchased for both the software

development and maintenance of the system. The software will be chosen based

on the systems requirement and competency. This is essential to provide future

support and to ensure the software’s stability and reliability.

3. Development Cost

- The total cost involved in the project development will be calculated. This

development cost will be equipped with detailed calculations including the

working hours of the project manager.

4. Stationary

- The stationary costs occurring in the development are the stationeries used such

as the pencils and papers from the early stage planning. It includes all the

stationery cost, used while the whole development process of this research.

5. Others

- This refers to the other cost that is involved during the developing process of the

software. It includes utility, transportation and other expenses. Most of the times

these elements of the cost are ignored but it can consume a significant amount if

it is not managed properly. Sample amounts are included in the Table 3.1.

Table 3.1: Sample Calculation of Total Development Cost of the System

System Cost Amount

Hardware cost RM 4000.00
Software cost RM 6000.00
Development cost RM 16000.00
Stationary RM 400.00
Others RM 600.00
Total Cost TC (RM
27000.00)

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3.4.4 Tangible Benefit

After calculating the cost occur (estimated cost RM 27000.00) in the the

development process of the system, the research is continued to identify the tangible

benefits of the system.The tangible benefit will be derived based on the value adding

functions. Given that it is difficult to calculate the accurate amount of the value of these

functions, an acceptable amount will be fixed for each category selected. It is vital to

remember that other than the tangible benefits being taken into consideration here,

there are other intangible benefits such as the improved efficiency and reduced booking

errors.

This amount will be totalled together and will be the value added amount to the

formula in figure 3.3.The total cost TC equals to the cost (C) will be derived from the

development cost of the system as explained earlier under the tangible cost section

(section 3.4.3).The research is continued with listing and calculating the tangible

benefits from the system.

Table 3.2: Sample Calculation of the Total Tangible Benefits of the System

Tangible Benefits Per Month Per Year (x12)

1.Staff Reduction RM 1200 RM 24000.00
n. TB ( RM 24000.00)

3.4.5 Non Tangible Benefits

After listing and computing the total amount for the tangible benefits and

tangible cost, the non tangible benefits such as the system’s efficency and response rate

will be listed.

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3.4.6 Development Duration

By understanding the complexity of the system development, it is visible that

the payback period might take more than a year and will be the ongoing cost of the

system. But the value of the money spent on the project development and other cost

will be different in the future.

The present value analysis is used to commence this problem. This is used to

justify the money value at the present and the future.The shorter payback time (in

years) shows the suitability of the project to be conducted from the CBA viewpoint.

3.5 Present Value Analysis Method

Present Value = Current Amount X Discount Factor

Figure 3.5: The Present Value Analysis Formula

3.5.1 The Purpose of the Present Value Analysis

1. The Figure 3.5 (Gannon, 1998) helps to calculate the value of the future

expenses and benefits in terms of their present value (in RM).

2. Both expected benefit and cost will be substituted to calculate the respective

monetary value in the future.

3. To compare the benefits of different projects with the period of different

duration based on the current money value.

4. To compare today’s cost with the future cost and also to derive the current

identified benefits with the assumed future benefits that can be gained from this

new computerised system.

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 1
Discount Factor = ----------------------------------------------------------
(1 + Interest Rate) Year / Number of Period

Figure 3.6: The Discount Factor Formula in the Present Value Analysis

The values for the expected benefit and the cost are derived based on the Table

3.1 and Table 3.2 respectively from the CBA section. The proposed project’s expected

benefits over an estimated life span of N years will be counted based on the CBA and

will be filled in a table shown in the Table 3.3.EB is the total expected benefit from the

system.

Table 3.3: Template Table Showing Expected Benefit for N Years Lifespan

Year Expected Benefits (in RM)

1 RM 24000.00
2 RM 25000.00
N EB (RM EB)

After that, employing the PVA method with an interest rate of 10%, the values

will be gained and recorded to the following sample Table 3.4. The discount factor in

the Table 3.4 and Table 3.5 is calculated based on the discount factor formula in Figure

3.6. The increase in staff salary and other business operational expenses should be

included in calculating the expected benefit in Table 3.4. The recurring cost of

operating the system also should be considered in calculating cost for the system cost in

Table 3.5. Recurring cost is estimated as RM 2000.00 for system maintenance.

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 Table 3.4: Template Showing Value (Expected Benefit) after 10% is added

Year Expected Benefits Discount Factor PV of Benefits

1 RM 24000.00 0.9091 RM 21818.40
2 RM 25000.00 0.8264 RM 20660.00
Total PVB
( RM 42478.40)

Table 3.5: Template Table Showing Value (System Cost) after 10% is added

Year Cost Discount Factor PV of Cost

1 RM 27000.00 0.9091 RM 24545.70
2 RM 2000.00 0.8264 RM 1652.80
Total PVC
( RM 26198.50)

3.5.2 Net Present Value (NPV)

= Present value of Benefits – Present Value of the Costs

= PVB - PVC

= RM Value

This research can be further enhanced with more comprehensive PVA as in

Table 3.6. With such a complete PVA method, it would be easier not only to count the

worthiness of the system but to also calculate the payback period more effectively.

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 Table 3.6: Template of Combined Present Value Analysis

Year Annual Annual Discount Discounted Discounted Discounted Cumulative

Cost Benefit Factor Cost (DC) Benefit (DB) Net Discounted
AC AB (in DF AC x DF AB x DF DB - DC Benefit
RM)
RM RM RM -
0 24000.00 0.00 1.0000 RM 24000- RM 0.00 24000.00 24000.00
RM RM RM RM -
1 24000.00 27000.00 0.9091 24545.70 22314.50 RM 2231.20 2231.20
RM
2 25000.00 2000.00 0.8264 RM 1652.80 RM 1365.87 RM 286.93 RM -286.93
n

3.5.3 Conclusion of the Present Value Analysis

If the benefits are greater than the development cost and the payback period

have a much shorter break event point so it is economically feasible to continue with

this project.

3.6 Steps in Calculation

1. Understand Value Chain Analysis (VCA) formula

2. Substitute Cost benefit Analysis (CBA) formula to the VCA formula

3. Perform the CBA

4. Substitute Present Value Analysis (PVA) with the CBA values

5. Perform PVA

6. Final Value of the system

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 By following these steps, a complete and comprehensive amount can be derived

to support the system’s continuation. The following Figure 3.7 explains the steps in

stages. All the inputs and the output results at each stage of the analysis will be

discussed in detail in Chapter 10 (Discussion and Conclusion).

Value Added (v) - Cost (c) = Profit (p) Value Chain

Analysis

Step 1

CBA = Total Benefit – Total Cost

Cost Benefit
Analysis
Step 2

Present Value = Current

Amount X Discount Factor Present Value
Analysis
Step 3

Result

Step 4

Figure 3.7: Steps in Calculating Profit in a VCA using CBA and PVA

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