Paper 6: Management Information System

Module 25: System Analysis

Prof. S P Bansal
Principal Investigator Vice Chancellor
Maharaja Agrasen University, Baddi

Prof Yoginder Verma

Co-Principal Investigator Pro–Vice Chancellor
Central University of Himachal Pradesh. Kangra. H.P.

Prof. Manu Sood

Paper Coordinator Chairman, Department of Computer Science,
H.P University, Summer Hill, Shimla.
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Vinodini Kapoor
Content Writer Asst. Prof, Northern India Institute of Fashion Technology
Mohali, India
Items Description of Module
Subject Name Management
Paper Name Management Information System
Module Title System Analysis
Module Id Module No.-25
Pre- Understanding of system development and requirement specification.
Requisites
Objectives To Understand the concept of system analysis and its stages.
Keywords Organizational analysis, logical analysis, functional analysis, present system analysis,
system analyst

QUADRANT-I

Module-25 System Analysis

1. Learning Outcome
2. Introduction
3. System Analysis
3.1 Stages of System Analysis
4. Organizational Analysis
4.1 Analysis of the Present System
5. Logical Analysis
6. Functional Requirements Analysis and Determination.
6.1 Benefits of System Analysis
7. Summary

1. Learning Outcome:
After completing this module the students will be able to:
 Understand the concept of System Analysis and why is it needed.
 Understand System Process and List its various stages.
 Understand the concept of Organizational Analysis and its importance.
 Understand the concept of Analysis of the Present System.
 Explain Logical Analysis.
 Discuss the Functional Requirements Analysis and Determination.
 List various benefits of System Analysis

2. Introduction
A system can be defined as a set of parts, sub parts or components that are networked to form a function
or process. For example, a computer system contains processors, memory, electrical pathways, a power
supply, etc. For a very different example, a business is a system made up of methods, procedures, and
routines. Systems analysis supports problem-solving method by looking at the composite system first and
then breaking apart the parts and figuring out how it works in order to achieve a particular goal.
Exhibit1: System Analysis
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Broadly, systems analysis as a process first collects data, studies the processes involved and then
identifies problems and recommends feasible suggestions for improving the system functioning. It is
important to note that the process for system analysis should be in line with the business activities of the
organization.

Exhibit2: System Analysis

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Installing a new system which could be a smoke alarm, an office automation suite, a computerized billing
process requires proper planning. Without prior planning and systems analysis, the change might not
work. One needs a clear understanding of how the current system works, before any new feature is
installed. Otherwise there may be problems, and the project could be a failure. The major objective of
systems analysis is to understand each business process: what is being done; how is it being done; who is
doing it; when is he doing it; why is it being done and how can it be improved? It is more of a thinking
process which involves the analytical skills of a technical expert such as a system analyst. It attempts to
give birth to a new efficient system that satisfies the current needs of the user and has scope for future
growth within the organizational constraints. This is referred to as the logical system design.

Exhibit 3: What is System Analysis?

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The system analyst is assumed to possess knowledge about the core skills involved in system analysis.
Any of the information systems projects move through the four basic phases. These are planning,
analysis, design, and implementation. Each phase has a prerequisite to gather requirements related to
business needs, and create a blueprint of the system to be built. At the same time organizational aspects
such as change management and team building should be kept in mind.

Opening Case: Managerial Cause of Informational Technology Failure

A significant proportion of IT projects fail to achieve objectives, resulting in abandoning resources and
keeping the reputation at stake. In many cases, the causes of the failure are organizational issues, not
technical issues.

Exhibit 4: Quantas Airways

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Qantas, the Australian airline, encountered not one but two high-profile IT failures in recent years. Back
in 1995, Qantas decided to terminate the service contract with IBM at a whooping cost of $200 million.
This was done owing to poor planning and failure to upgrade the IT infrastructure which comprised 700-
odd applications written in older programming languages. Further in 2008, Qantas canceled a $40 million
management system implementation of spare parts. The underlying reason was a prolonged dispute with
the unionized users (aircraft mechanics) of the system. The union advised its members not to support the
implementation stage due to surmounting workload. A deeper analysis reveals several contributing
factors. First, Qantas faced the challenges of old infrastructure and outdated legacy applications.

Exhibit 5: Information Systems Failure

Image Source: http://ukipnw.org.uk/wp-content/uploads/2015/12/systemfailure.jpg

More significantly, the management overlooked basic IT issues. In public statements, the company CTO
seemed to disregard the user’s view point on new software, pushing what management thought was
appropriate. This only created miscommunication and distrust. The system was rendered to be poor on
design parameters, complex software and left the staff incompetent to use it. Aging applications and
outdated infrastructure are common challenges faced by many organizations today. But the commitment
of the senior management to focus on software requirements and upgrades come a long way in
determining the success of an IS implementation.
Source: http://www.zdnet.com/article/qantas-airways-a-perfect-storm-for-it-failure/

3. System Analysis
The analysis phase determines who will use the system, what the system will do, and where and when it
will be used. All of the deliverables are combined into a system proposal, which is presented to
management, who decides whether the project should continue to move forward. The analysis phase is so
named because the term analysis refers to breaking a whole into its parts with the intent of understanding
the parts’ nature, function, and interrelationships.

Understand As - IS Requirements for to

Improvements
System be System

Fig1. System Analysis Basic Steps

The basic process of analysis involves three steps:

■ The - as is - system: It helps to determine the characteristics of the current system.

■ Identify necessary improvements.
■ The - to be - system: Define requirements of the new system

It is important for the technical experts to use a systematic approach to identify hardware and software
needs, identify and compare costs and benefits, and choose the most appropriate alternative. The final
phase of analysis is the system proposal, which compiles the detailed requirements definition statement,
use cases, process models, and data model together with a revised feasibility analysis and work plan.

The system proposal is presented in the form of a system snapshot. The goal is to explain the system in
moderate detail so that the users, managers, and key decision makers clearly understand it, can identify
any needed modifications, and are able to make a decision about whether the project should continue.
Prior to the design phase, the project should be reviewed to ensure that it continues to contribute business
value to the organization. The fine line between the analysis and design phases is important to understand
because the deliverables created in the analysis phase are really the first step in the design of the new
system.

3.1 Stages of System Analysis

Recognition and Definition of the Definition of the

formulation of the objectives of the overall economic
problem system. criterion

Definition of the
Organization of the Information and data
objectives of the
project collection
wider system

Definition of the
Definition of the overall system that
system contains the system
being studied.

Fig2. Process of System Analysis

The process of System Analysis involves the following stages:

1. Recognition and formulation of the problem - Firms and organizations encounter numerous problems
that arise in the working of their organizations, which leads to improved efficiency and profitability. The
job of the systems analyst is to provide effective solutions to those problems to make a planning decision
or to implement a planning decision.
Exhibit 6: Formulating the Problem
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The brainstorming may require an answer to questions such as:

 What is the cause of the problem?

 Who has diagnosed the problem?
 What leads to the making of the decision?
 Why is the solution important? How much money might it save?

Inevitably, the resources available to the firm are always limited. Does it seem that there would be a
reasonable return on systems effort if applied to the project or would this effort be better employed in
tackling a different problem? As a result of this dialogue, a clearer picture shall emerge about the scope of
the problem and the likely benefits that would result from its solution.

2. Organization of the project

1. Composition of the systems team - Once the scope of the problem is defined the course of action is to
be formulated. This requires a team effort and an ad hoc systems team shall be set. Ideally, this comprises
the developers within the organization and specialist who may anticipate various facets of the solution
design. The best resources available within the organization for tackling the problem should be brought
together and, with efficient leadership, they can develop into a systems team very quickly.

Exhibit 7: Building the IT Team

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content/themes/perituza/images/growteamicon.png
A typical systems team may contain a competent team lead who is an experienced systems engineer with
domain knowledge of the problem that is to be tackled. A user is a person who represents the team that
shall operate the engineered system. System modeling experts’ liaison with functional departments (such
as research, process development and sales departments) which will be able to provide information for the
sub-systems models. Designers for the building of hardware, representatives of the engineering team who
will be responsible for the design of this hardware to meet the system specification. Computer
programmers who shall be involved with the software development.

2. Terms of reference - The systems team should take steps to ensure that they are given the widest
possible terms of reference and are given access to any information or person.

3. Scheduling the project - The engineering team should apply the systems approach to conduct its
activities and ensure that the work is carried out logically and systematically in an allotted timeframe.
Thus, a decision network should be constructed (for example a critical path schedule), target set and
duties allocated. The systems team will then ensure, by its critical approach to its own method of working,
that problems are tackled in their correct order of importance.

Exhibit 8: Scheduling the Project

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3. Definition of the system - This is a process of analysis in which the system is segmented into its
important sub-systems and the interactions between these sub-systems are indicated by drawing a flow-
block diagram. The subsequent task of the systems engineer is to design or engineer the individual sub-
systems so that they work together towards achieving an overall objective.
The systems design process must be sufficiently flexible, so that this description can be changed as
further knowledge and experience is accumulated during the course of the project. This is especially
important in the design of a new system when there may be very inadequate knowledge at the start of a
project. As the project proceeds, the system description tends to become clearer. There may be multiple
iterations before the final system is realized.

4. Definition of the overall system that contains the system being studied.
A separate block diagram is constructed here to display the role played by the system within the wider
system it is a part of. The flow-block diagram of the system as part of a wider system should include as
much detail that is available. It is essential that proper account is taken of the interactions between the
systems when formulating objectives.

5. Definition of the objectives of the wider system

A System is usually part of a bigger system it belongs to. It cannot work in isolation and cannot be
disassociated from the wider system. In fact, it is the objectives of the wider system that determine the
environment within which the system has to function. If this environment changes, then so will the
objectives of the system change. To take a very simple example, the objectives of a single chemical plant
must fit into the overall production plan of the company. At different times the company plan may
stipulate one of several objectives. Therefore, in a process improvement exercise, there may not be one
unique objective but rather a catalogue of possible objectives, each resulting in a different way of
operating the plant.

6. Definition of the objectives of the system. This step involves an intricate study to ensure there are no
conflicting objectives and at the start of a system study it is essential to make a comprehensive list of all
possible objectives in their ranked order of importance. One, or possibly a few, objectives might then be
singled out as being the most important ones.
At this important stage of any systems study, much questioning will have to be done and different views
are considered. In the end the systems analyst decides about the correct objectives and takes a binding
with all concerned and finally communicates his findings to everybody so that their future cooperation
can be relied upon.

7. Definition of the overall economic criterion – The system analyst should formulate the cost assessment
of the changes or improvements to be incorporated. This process needs a critical study to assess how
important are the changes and the investment and how shall it affect the organization.

8. Information and data collection – The end user of the information system should carry sufficient
knowledge about the working of the system. Hence, the need for documenting system related information
is of paramount importance. It is essential for an organization to draft manuals and instructions related to
implementation of the information system. This knowledge has to be retained within the organization so
that there isn’t a loss of information if the system engineers and analyst leave the organization.

4. Organizational Analysis

An organizational analysis is an important first step in system analysis. To improve the information
system it is imperative for the developers to be well versed with the organizational climate where the
system is located. It is essential to have an understanding of the organizational and management reporting
structure, the people, the business initiatives undertaken and the business environment. It is important to
be well versed with the organizational overview, to understand the requirements and needs of an
information system from view of its end user – the business units and workgroups. They are the end users
who will be most affected when the management information system will be enforced.
Exhibit 9: Organizational Analysis
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E.g., A new logistics control system for a grocery chain of stores cannot be designed unless the
developers understand the business needs of the company and business activities that affect the logistic
supply.

4.1 Analysis of the Present System

Before designing the new system, it is important to study the system and understand its interaction with
the existing hardware, software, network, and people. The basic elements of an information system such
as input, processing, output, control are then documented.

In estimating hardware and software needs, systems analysts should consider the following:
1. Computer hardware already available in the organization.
2. Current and projected capacity of the system.
3. Monitor performance of hardware and software using industry benchmarks.
4. Choose the vendor according to the evaluation.
5. Acquire the hardware and software from the selected vendor.

5. Logical Analysis
The logical model of the system displays only what the current system does without any regard to the
underlying process. The logical analysis helps the analyst to comprehend the various processes, functions
and data associated without getting bogged down with all the issues surrounding the hardware or the
software. It also enables to understand and analyze the non computer components of the system.
The application of the concept of the logical model is not merely limited to use in the design of an
information system. They are commonly used in a variety of situations example remodeling of the
organizational infrastructure.

6. Functional Requirements Analysis and Determination

This is the most challenging step of the system analysis. The analyst works with a team of end users to
determine what type of information each business activity requires, what is its format, volume and
frequency and what responses are necessary.
It is essential to determine the processing capabilities or throughput required for the system activities
(input, processing, output, storage, control) to meet the information needs.

Exhibit 10: User Interface Requirements

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These requirements can be stated as:

 User interface requirements – One determines what type of input and output requirement of the
user are there. It also includes the source, formats, content etc of each input and output media.
 Processing requirements – What are decision rules, calculation to convert input to output and the
time it takes for processing the input into output.
 Storage Requirements – What is the size of the database; whether it is a common database or a
distributed one?
 Control Requirements – Here the measures of accuracy, validity, safety, security and adaptability
requirements for system are adopted.

6.1 Benefits of System Analysis

Better Management
Cost ,Efficiency, Risk
& Control
Flexibility

Customized
Quality Competence
Approach

Versatility Profitability

Fig3. Benefits of System Analysis

 The various benefits derived from the System Analysis stage are:

 Optimum Cost and Efficiency - A planned approach to system analysis determines that the correct
path is chosen which helps to minimize errors on account of overheads at later stages. This helps
in cost minimization and ensures that the right application path is being taken the first time. Also,
growth and business considerations have been accounted for to accommodate future plans.

 Better Management and control - System analysis allows for better management through
customizing the software features as per customer requirements. If changes or enhancements are
required in any one part of the system a change request shall help to incorporate it without the
need to rewrite the code altogether.

 Risk Mitigation - A risk assessment checks for any loop holes in the system that may pose a
problem later. The assessment helps to determine the effort and resources involved in
incorporating necessary changes and measure their corresponding benefits.

Exhibit 11: Quality Assurance

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content/uploads/2015/12/Quality_control_starts_at_your_front_door.fw_.png

 Quality - The quality of the systems is ensured through the checking of the system thoroughly and
developing it as per industry requirements.

 Customized Approach – This involves personalization of the information systems’ design as per
requirements of the end user. A customer will be keen to buy a platform suited to its needs rather
than a generic one.

 Competence – This is a crucial stage where different firms work together to sell a unique
proposition. This helps in addressing the market with a competent solution. The organizations can
cater to a larger market base and yield higher profits.

 Versatility - System analysis and design can be used to improve procedures in handling accounts
receivable, in preparing and implementing a budget and in scheduling regular or one-time
 projects. It further helps to identify, develop and market new products.

Exhibit12: Profitability
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 Profitability - The purpose of business is to yield profit. An obvious advantage of analysis and
design is to improve business quality and enhance profit. Low quality or substandard products
can have detrimental consequences on a business over time. The costs involved with iterative
changes delays projects and increases overheads. It also leaves an opportunity for the competitors
to capture the market. The benefits of an integrated system include higher levels of quality control
and lower production costs by streamlining data processing and production processes.

7. Summary
System analysis is the analysis of a problem that a firm tries to solve with an information system. Its
focus is on capturing the business requirements for the system. The analysis identifies the “what” of the
system, and it leads directly into the design phase, during which the “how” of the system is determined.
Many deliverables are created during the analysis phase, including the requirements definition, use cases,
process models, and data sets. Information management systems essentially list requirements which are
approved by the business owner, before technical design begins. This way, the business owner is involved
in “sign-off” of the requirements. The technical team is also involved with specifying requirements so
they are in a better position to understand what is needed. It helps ensure that the technical team does not
design and build something that is not specified. Requirements management will ensure that project
management scope for design and construction does not deviate from requirements thus minimizing time
delays and cost over-run due to re-work. At the end of analysis, all of these deliverables, along with
revised planning and project management deliverables, are combined into a system proposal and
submitted to the approval committee for a decision regarding whether or not to move ahead with the
project. Hence, a complete information systems analysis is needed to ensure rapid project delivery and
optimal return on information management investment.