Systems Analysis  Design Page 1 Chapter 4

Chapter 4
Systems Analysis
Systems Planning and Initial Investigation
The primary purpose of systems planning is to identify problem’s nature and its scope. It
also includes preliminary (or initial) investigation and feasibility study. Initial
investigation is used to understand the problem, define the project scope and constraints,
identify the benefits, estimate the time and costs, and interact with managers and users.
Feasibility study is used to determine some feasibility (economic, operational, technical
feasibility etc) of the system.
The purpose of this phase is twofold. First, it answers the question, “Is this project
worth looking at?” Second, assuming that the problem is worth looking at, it establishes
the size and boundaries of the project, the project vision, any constraints or limitations,
the required project participants, and the budget and schedule.

Information Gathering Techniques

To develop an information system, we first must be able to correctly identify, analyze,
and understand what the users’ requirements are or what the user wants the system to do.
To know users’ requirements, we use information gathering techniques. Information
gathering techniques are also called requirements discovery techniques or fact finding
techniques or data collection techniques. Information gathering includes those
techniques to be used by system analysts to identify or extract system problems and
solution requirements from the user community. Systems analysts need an organized
method for information gathering. Some information gathering techniques are discussed
below:
Sampling of Existing Documentation, Forms, and Files
When we are studying an existing system, we can develop a good feel for the system by
studying existing documentation, forms, and files. A good analyst always gets facts from
the existing documentation rather than from people.
Because it would be impractical to study every occurrence of every form or record in
a file or database, system analysts normally use sampling techniques to determine what
can happen in the system.
Sampling is the process of collecting a representative sample of documents, forms,
and records. The most commonly used sampling techniques are randomization and
stratification.
Randomization is a sampling technique in which there is no predetermined pattern or
plan for selecting sample data.
Stratification is a systematic sampling technique that attempts to reduce the variance
of the estimates by spreading out the sampling.
Research and Site Visits
In this technique, we perform site visits at systems they know have experienced similar
problems. If these systems are willing to share, valuable information can be obtained that

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may save tremendous time and cost in the development process.

Computer trade journals and reference books are also a good source of information.
They can provide us with information how others have solved similar problems. Also,
through the Internet we can collect immeasurable amounts of information.
Observation of the Work Environment
Observation is an effective data-collection technique for obtaining an understanding of a
system. In this technique, the systems analyst either participates in or watches a person
performing activities to learn about the system.
Advantages:
 Data gathered can be highly reliable. Sometimes observations can be conducted to
check the validity of data obtained directly from individuals.
 The systems analyst is able to see exactly what is being done.
 It is relatively inexpensive compared to other fact-finding techniques, because
other techniques usually require more employees.
 It allows the system analyst to do work measurement.
Disadvantages:
 People usually feel uncomfortable when being watched to their work.
 Some system activities may take place at odd times, causing a scheduling
inconvenience for the system analyst.
 It may cause interruption.
 Some tasks may not always be performed by observation.
Questionnaires
This technique is used to conduct surveys through questionnaires. Questionnaires are
special purpose documents that allow the analyst to collect information and opinions
from the respondents. The document can be mass-produced and distributed to
respondents, who can then complete the questionnaire on their own time. Questionnaires
allow the analyst to collect facts from a large number of people.
Types of Questionnaires
There are two formats of questionnaire, free-format and fixed-format. Free-format
questionnaire offer the respondent to record the answer in the space provided after the
questionnaire.
Fixed-format questionnaire contain questions that require selection of predefined
responses. In this format, the respondent must choose from the available answer.
There are three types of fixed-format questions:
 Multiple Choice Questions: - The respondent is given several answers of a
question. The respondent should be told if more than one answer can be selected.
 Rating Questions: - The respondent is given a statement and asked to use
supplied responses to state an opinion.
 Ranking questions: - The respondent is given several possible answers, which
are to be ranked in the order of preference or experience.
Advantages
 Most questionnaires can be answered quickly.
 Inexpensive for gathering data from a large number of individuals.

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 Responses can be tabulated and analyzed quickly.

Disadvantages
 There is no guarantee that an individual will answer or expand on all the
questions.
 Questionnaires tend to be inflexible.
 It not possible for the systems analyst to observe and analyze the respondent’s
body language.
 There is no immediate opportunity to clarify a vague or incomplete answer to
questions.
 Good questionnaires are difficult to prepare.
 The number of respondents is often low.
Interviews
The personal interview is generally recognized as the most often used fact-finding
technique. Interviews are the fact-finding techniques whereby the systems analysts
collect information from individuals through face-to-face interaction.
There are two roles assumed in an interview. The systems analyst is the interviewer,
responsible for organizing and conducting the interview. The system user or system
owner is the interviewee, who is asked to respond to a series of questions.
Types of Interviews
There are two types of interviews: unstructured and structured. Unstructured
interviews are conducted with only a general goal or subject in mind and with few, if
any, specific questions. Structured interviews on the other hand are conducted with a
set of specific questions to ask the interviewee.
Types of Questions
There are two types of questions in interview: open-ended and closed-ended. Open-
ended questions allow the interviewee to respond in any way that seems appropriate.
But, closed-ended questions restrict answers to either specific choices or short, direct
responses.
Advantages
 Interviews give the analyst an opportunity to motivate the interviewee to respond
freely and openly to questions.
 Interviews allow more feedback from the interviewee.
 Interviews give the analyst an opportunity to observe the interviewee’s nonverbal
communication.
Disadvantages
 Interviewing is a very time-consuming and therefore costly fact-finding approach.
 Success of interviews is highly dependent on the systems analyst’s human
relational skills.
 Interviewing may be impractical due to the location of interviewees.
Discovery Prototyping
Discovery prototyping is the act of building a small-scale, representative or working
model of the users’ requirements to discover or verify the requirements.
Usually only the areas where the requirements are not clearly understood are

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prototyped. Creating discovery prototypes enables the developers as well as the users to
better understand and refine the requirements involved with developing the system.
Advantages
 Allows users and developers to experiment with the software and develop an
understanding of how the system might work.
 Aids in determining the feasibility and usefulness of the system before high
development costs are incurred.
 Serves as a training mechanism for users.
 Aids in building system test plans and scenarios to be used last in the system
testing process.
 May minimize the time spent for fact-finding and help to define more stable and
reliable requirements.
Disadvantages
 Users and developers may need to be trained in the prototyping approach.
 Doing prototyping may extend the development schedule and increase the
development costs
 Users may develop unrealistic expectations.
Joint Requirements Planning (JRP)
It is a process whereby highly structured group meeting is conducted to analyze problems
and define requirements. JRP is a subset of a more comprehensive joint application
development (JAD). The JRP participants are:
 Sponsor: - This person is normally an individual who is in top management and
has authority that spans the different departments and users who are to be
involved in the systems project.
 Facilitator: - The JRP facilitator or leader is usually responsible for leading all
sessions that are held for a systems project.
 Users and Managers: - Users devote themselves to the JRP sessions to
effectively communicate business rules and requirements, review design
prototypes and make acceptance decisions. Managers approve project objectives,
establish project priorities, approve schedules and costs, and approve identified
training needs and implementation plans.
 Scribe(s): - Scribes are responsible for keeping records pertaining to everything
discussed in the meeting.
 IT Staff: - IT personnel listen and take notes regarding issues and requirements
voiced by the users and managers. Normally, IT personnel do not speak unless
invited to do so.
Benefits
 It actively involves users and managers in the development project.
 It reduces the amount of time required to develop systems.
 When JRP incorporates prototyping as a means for conforming requirements and
obtaining design approvals, the benefits of prototyping are realized.

Structured Analysis Tools

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Structured analysis includes different tools like DFD (data flow diagram), ERD (entity
relationship diagram), data dictionary, structured English, decision table, and decision
tree.

Feasibility Study
Feasibility is the measure of how beneficial or practical the development of information
system will be to an organization. Feasibility study is the process by which feasibility is
measured. Feasibility analysis is appropriate to the systems analysis phase.
Four Tests for Feasibility
During systems analysis phase, the system analyst identifies different alternate solutions and
analyzes those solutions for feasibility. To analyze different alternative solutions, most
analysts use four categories of feasibility tests: operational feasibility, technical
feasibility, schedule feasibility, and economic feasibility.
1. Operational Feasibility: It is a measure of how well the solution will work in an
organization. It is also a measure of how people feel about the system/project. So,
this feasibility is people oriented. Operational feasibility addresses two major
issues:
a. Is the problem worth solving, or will the solution to the problem work?
b. How do end users and management feel about the problem (solution)?
When determining operational feasibility, usability analysis is often performed
with a working prototype of the proposed system. Usability analysis is a test of
system’s user interfaces and is measured in how easy they are to learn and to use
and how they support the desired productivity levels of the users. Usability is
measured in terms of ease of learning, ease of use, and satisfaction.
2. Technical Feasibility: It is a measure of practically of a specific technical
solution and availability of technical resources and expertise. Technical feasibility
is computer oriented. This feasibility addresses three major issues:
a. Is the proposed technology or solution practical?
b. Do we currently possess the necessary technology?
c. Do we possess the necessary technical expertise, and is the schedule
reasonable?
3. Schedule Feasibility: It is a measure of how reasonable the project timetable is.
Schedule feasibility is the determination of whether the time allocated for a
project seems accurate. Projects are initiated with specific deadlines. It is
necessary to determine whether the deadlines are mandatory or desirable. If the
deadlines are desirable rather than mandatory, the analyst can propose alternative
schedules.
4. Economic Feasibility: It is the measure of the cost-effectiveness of a project or
solution. This feasibility deals with costs and benefits of the information system.
The bottom-line in many projects is economic feasibility. During the early phases
of the project, economic feasibility analysis amounts to little more than judging
whether the possible benefits of solving the problem are worthwhile. However, as
soon as specific requirements and alternative solutions have been identified, the
analyst can determine the costs and benefits of each alternative.

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Some other feasibility tests are also possible. These are legal and contractual feasibility
and political feasibility. Legal and contractual feasibility is the process of assessing
potential legal and contractual ramifications due to the construction of a system. Political
feasibility is the process of evaluating how key stakeholders within the organization view
the proposed system.

Cost-Benefit Analysis Techniques

Economic feasibility has been defined as a cost-benefit analysis. Most schools offer
coerces like financial management, financial decision analysis, and engineering
economics and analysis for cost benefit analysis. The cost benefit analysis techniques
include:
 How much will the system costs?
 What benefits will the system provide?
 Is the proposed system cost-effective?
How much will the system costs?
Costs fall into two categories: costs associated with developing the system and costs
associated with operating the system. The former costs can be estimated from the start of
the project and should be refined at the end of each phase of the project. The later can be
estimated only after specific computer-based solution has been defined.
System development costs are usually onetime costs that will not recur after the
project has been completed. Many organizations have standard cost categories that must
be evaluated. In the absence of such categories, we use the following list:
 Personnel cost – The salaries of systems analysts, programmers, consultants, data
entry personnel, computer operators, secretaries, and the like who work on the
project.
 Computer usage – The cost in the use of computer resources.
 Training – Expenses for the training of computer personnel or end-users.
 Supply, duplication, and equipment costs.
 Cost of any new computer equipment and software.
The operating costs tend to recur throughout the lifetime of the system. The costs in this
case can be classified as fixed or variable.
 Fixed costs – Fixed costs occur at regular intervals but at relatively fixed rates.
Some examples include: lease payments and software license payments, salaries
of IS operators and support personnel etc.
 Variable costs – Variable costs occur in proportion to some usage factor. Some
examples include: costs of computer usage (e.g., CPU time used, storage used),
supplies (e.g., printer paper, floppy disks), overhead costs (e.g., utilities,
maintenance, and telephone service) etc.
What benefits will the system provide?
Benefits normally increase profits or decrease costs. Benefits can be classified into two
categories: tangible and intangible.

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 Tangible benefits – Tangible benefits are those that can be easily quantified.
These benefits are usually measured in terms of monthly or annual savings or of
profit to the firm. Alternatively, these benefits might be measured in terms of unit
cost savings or profit. Some examples of tangible benefits are: fewer processing
errors, increased throughput, decreased response time, elimination of job steps,
increased sales, reduced credit losses, and reduce expenses.
 Intangible benefits – Intangible benefits are believed to be difficult or impossible
to quantify. Unless these benefits are at least identified, it is entirely possible that
many projects would not be feasible. Some examples of intangible benefits are:
improved customer goodwill, improved employee morale, better service to
community, and better decision making.
Unfortunately, if a benefit cannot be quantified, it is difficult to accept the validity of an
associated cost-benefit analysis that is based on incomplete data.
Is the proposed system cost-effective?
There are three popular techniques to assess economic feasibility, also called cost-
effectiveness: payback analysis, return to investment, and net present value.
One concept that is shared by all three techniques is the time value of money – a
dollar today is worth more than a dollar one-year from now.
Some of the costs of the system will be accrued in after implementation. Before cost-
benefit analysis, these costs should be brought back to the current dollars. Present value
is the current value of a dollar at any time in the future. It is calculated using the formula:
PVn = 1/(1 + i)n
Where PVn is the present value of $1.00 n years from now and i is the discount rate.
 Payback analysis – It is a technique for determining if and when an investment
will pay for itself. Because system development costs are incurred long before
benefits begin to occur, it will take some time for the benefits to overtake the
costs. After implementation, there will be additional operating expenses that must
be recovered. Payback analysis determines how much time will lapse before
accrued benefits overtake accrued and continuing costs. This period of time is
called payback period, that is, the period of time that will lapse before accrued
benefits overtake accrued costs.
 Return-on-investment analysis – This technique compares the lifetime
profitability of the solution. It is a percentage rate that measures the relationship
between the amounts the business gets back from an investment and the amount
invested. It is calculated as follows:
Lifetime ROI = (Estimated lifetime benefits – Estimated lifetime costs)/Estimated
lifetime costs
 Net present value – It is an analysis technique that compares costs and benefits
for each year of the system’s lifetime. Many managers consider it the preferred
cost-benefit analysis technique.

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