Chapter 5

AIS Development 20-1

5.1. Systems Development
and Documentation
Techniques
Data Flow Diagrams
A data flow diagram (DFD) graphically
describes the flow of data within an
organization.
It is used to document existing systems
and to plan and design new ones.
There is no ideal way to develop a DFD.
Data Flow Diagrams
A data flow diagram (DFD) is composed of
the following four basic elements:
1 Data sources and destinations
2 Data flows
3 Transformation processes
4 Data stores
Data Flow Diagram Symbols

Data Source and destinations

Data Flows

Transformation Processes

Data Stores
Data Flow Diagram Symbols
A data source or data destination symbol on
the DFD represents an organization or
individual that sends or receives data that
they system uses or produces.
A data flow represents the flow of data
between processes, data stores and data
sources and destinations.
A transformation process represents the
transformations of data.
A data store is a temporary or permanent
repository of data.
A data dictionary contains description of all
the elements, stores, and flows in a system.
 Data Flow Diagrams

Data Data flow (B) Process Data flow (D)

source (C)
(A)
Data flow (E)
Data
destination
(J)
 Data Flow Diagrams

Data store (H)

Data flow (G)

Data flow (D) Process Data

Data flow (I) destination
(F) (K)
 Data Flow Diagrams
Customer Remittance data
payment (B) (D)
Customer Process
(A) payment
(C)
Deposit (E)

Bank
(J)
Data Flow Diagrams
Accounts
receivable
(H)
(G)
Remittance Receivables
data information
(D) Update (I) Credit
receivables manager
(F) (K)
 Data Flow Diagrams
Data flow diagrams are subdivided into
successively lower levels in order to provide
increasing amounts of detail.
The highest-level DFD is referred to as a context
diagram.
What is the context diagram for S&S payroll
processing?
Data Flow Diagrams

Time
cards
Departments
Payroll
processing
system
Human
resources Employee
data
Data Flow Diagrams
Tax reports and payments Government
agencies

Payroll Employee Employees

paychecks
processing
system Payroll
check Bank

Payroll report Management

Data Flow Diagrams
The context diagram for S&S payroll processing
shows that the payroll processing system...
– receives time cards from different departments.
– receives employee data from the human resources
department.
When these data are processed, the system
produces...
– tax reports and payments for governmental
agencies.
– employee paychecks.
– a check to deposit in the payroll account at the
bank.
– management payroll reports.
Flowcharts
A flowchart is an analytical technique used
to describe some aspect of an information
system in a clear, concise, and logical
manner.
Flowcharts use a standard set of symbols to
pictorially describe transaction processing
procedures.
Flowchart Symbols
Flowcharting symbols can be divided into
the following four categories:
1 Input/output symbols
2 Processing symbols
3 Storage symbols
4 Flow and miscellaneous symbols
Flowcharting Symbols:
Some Input Output Symbols
Symbol Nam
e
Document
Online keying

Display
Input/output;
Journal/ledger
Flowchart Symbols:
Some Processing Symbols

Symbol Nam
e

Manual operations

Computer processing

Auxiliary operation
 Flowchart Symbols:
Some Storage Symbols
Symbol Name

Magnetic disk

Magnetic tape
Flowchart Symbols: Some Flow
and Miscellaneous Symbols
Symbol Name
Document or processing flow
On-page connector

Off-page connector

Terminal

Decision
What are Document
Flowcharts?
A document flowchart illustrates the
flow of documents and information
between areas of responsibility within
an organization.
A document flowchart is particularly
useful in analyzing the adequacy of
control procedures.
Flowcharts that describe and evaluate
internal controls are often referred to as
internal control flowcharts.
What are System Flowcharts?
System flowcharts depict the relationship
among the input, processing, and output of
an AIS.
A system flowchart begins by identifying
both the inputs that enter the system and
their origins.
The input is followed by the processing
portion of the flowchart.
What are Computer System Flowcharts?
The resulting new information is the output
component.
System flowcharts are an important tool of system
analysis, design, and evaluation.

Input

Storage Process

Output
What are Program
Flowcharts?
A program flowchart describes the specific
logic to perform a process shown on a
systems flowchart.
A flow line connects the symbols and
indicates the sequence of operations.
The processing symbol represents a data
movement or arithmetic calculation.
What are Program
Flowcharts?
Input data

No
If a condition is met

Yes
Perform calculation

Update record
What are Program
Flowcharts?
The input/output symbol represents
either reading of input or writing of
output.
The decision symbol represents a
comparison of one or more variables
and the transfer of flow to alternative
logic paths.
All points where the flow begins or ends
are represented by the terminal symbol.
Flowchart for Processing
Credit Orders
Enter
Start sales
order

Approved No Reject
for credit? order

Yes
Inventory No Back-
available? order

Yes

Fill order Stop

 Differences Between
DFDs and Flowcharts
DFDs emphasize the flow of data and what is happening
in a system, whereas a flowchart emphasizes the flow
of documents or records containing data.
A DFD represents the logical flow of data, whereas a
flowchart represents the physical flow of data.
Flowcharts are used primarily to document existing
systems.
 DFDs, in contrast, are primarily used in the design of
new systems and do not concern themselves with the
physical devices used to process, store, and transform
data.
DFDs make use of only four symbols.
Flowcharts use many symbols and thus can show more
detail.
 Introduction to System
Development

Why Update Systems?

User or business changes
Technology changes
To improve business process
Create competitive advantage
Increase productivity gains
Integrate multiple systems
Aging systems need replacement

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 Software Development
Problems
Most software development projects deliver
less, cost more, and take longer than
expected.
Standish Group found that:
 70 percent of software development projects were
late
 54 percent were over budget
 66 percent were unsuccessful
 30 percent were canceled before completion
American Management Systems found that:
 75 percent of all large systems are not used
 Not used as intended, or
 Generate meaningless reports or inaccurate data

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 Systems Development Life Cycle
(SDLC)

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 SDLC Steps
System Analysis
Information about system needs, costs, and so on
are gathered.
Conceptual Design
Gather system/user requirements.
Physical Design
Concepts are translated into detailed specifications.
Implementation and Conversion
New hardware and software are installed and
tested.
Employees are hired and trained or existing
employees relocated.
Processing procedures are tested and modified.
Standards and controls for the new system are
established and system documentation completed.
Operation and Maintenance
New system is periodically reviewed.
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Modifications are made as problems arise or as new
 Systems Analysis Activities

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 People Interacting in SDLC
Management
Accountants
Users
Information systems steering committee
Project development team
Systems analysts and programmers

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 Planning SDLC
 Project Development Plan
Cost/benefit analysis
Developmental and operational requirements
(people, hardware, software, and financial)
Schedule of the activities required to develop and
operate the new application
 Master Plan
What the system will consist of
How it will be developed
Who will develop it
How needed resources will be acquired
Where the AIS is headed

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 Planning Technique—PERT
Chart
Program Evaluation and Review Technique
(PERT)
Network of arrows and nodes representing
project activities that require an expenditure
of time and resources and the completion
and initiation of activities
Completion time estimates made
Critical path—the path requiring the greatest
amount of time is determined

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 Planning Technique—GANTT Chart
 A bar chart with project activities on the left-
hand side and units of time across the top
 Graphically shows the entire schedule for a
large, complex project

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 Feasibility Analysis
 Does it make sense to proceed with new system?
 Economic:
 Will system benefits justify the time, money, and resources
required to implement it?
 Technical:
 Can the system be developed and implemented using existing
technology?
 Legal:
 Does the system comply with all applicable federal and state
laws, administrative agency regulations, and contractual
obligations?
 Scheduling
 Can the system be developed and implemented in the time
allotted?
 Operational
 Does the organization have access to people who can design,
implement, and operate the proposed system? Will people use
20-38 the system?
 Capital Budgeting: Economic
Feasibility
Cost-Benefit Analysis Techniques
 Payback Period
 Benefits and costs are
 Number of years required for the
estimated and compared net savings to equal the initial
cost of the investment.
to determine whether the  Net Present Value (NPV)
system is cost beneficial.  Future benefits are discounted
 Benefits and costs that are back to the present.
 Initial cost is subtracted.
not easily quantifiable are  Positive NPV = economically
feasible.
estimated and included.  Internal Rate of Return (IRR)
 If they cannot be  The effective interest rate that
results in an NPV of zero.
accurately estimated, they  A project’s IRR is compared with a
are listed, and their minimum acceptable rate to
determine acceptance or
likelihood and expected rejection.
impact on the organization
evaluated.
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 System Failure Due to
Change
The best system will fail without the
support of the people it serves.
Why people resist change:
Fear
Lack of top management support
Lack of communication
Disruptive nature of change
Methods of instituting change
Biases and emotions
Personal characteristics and background

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40
 Types of Resistance
Aggression
Behavior that destroys, cripples, or weakens
system effectiveness, such as increased error
rates, disruptions, or deliberate sabotage
Projection
Blaming the new system for everything that
goes wrong
Avoidance
Ignoring a new AIS in the hope that the
problem (the system) will eventually go away

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 Preventing Resistance
Obtain management support
Meet user needs
Involve users
Stress new opportunities
Avoid being too emotional
Provide user training
Reexamine performance evaluation to
make sure they are aligned with new
system
Keep communication lines open
Control users expectations

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 Ways to Obtain an AIS
Purchase the software
Develop software in-house
Hire and external company to develop and
maintain new software

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43
 Purchasing Software
Off the Shelf (OTS) Canned
System capabilities for users with similar
requirements
Turnkey System
Hardware and software sold as a package
Application Service Provider (ASP)
Software is provided to user via the Internet

21-
44
 In-House System
Development
Main criteria for in-house development
Provides a significant competitive advantage
Risks of in-house development
Significant amounts of time required
Complexity of the system
Poor requirements defined
Insufficient planning
Inadequate communication and cooperation
Lack of qualified staff
Poor top management support

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45
 End-User Computing (EUC)
 Hands-on development, use, and control of computer- based information systems by
users
 Advantages of EUC
 User creation, control, and implementation
 Users decide whether a system should be developed and what information is
important.
 Systems that meet user needs
 Users discover flaws that IS people do not catch.
 Many of the user-analyst-programmer communication problems in traditional
program development are avoided.
 Timeliness
 Time-consuming cost-benefit analyses, detailed requirements definitions, and
the delays and red tape of the approval process can be avoided.

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46
 End-User Computing (EUC) (cont’d)
 Advantages of EUC (cont’d)
 Freeing up of systems resources
 The more information needs users meet, the more time
the IS department can spend on other development and
maintenance activities.
 Versatility and ease of use
 Users can change the information they produce or modify
their application any time their requirements change.

 Disadvantages to EUC:
 Logic and development errors
 Inadequately tested applications
 Inefficient systems
 Poorly controlled systems
 Poorly documented systems
 Incompatible systems
 Redundant data
 Wasted resources
 Increased costs
 Outsourcing the System
 Hiring an outside company to handle  Disadvantages:
all or part of an organization’s data  Inflexibility
processing activities  Reduced competitive
 Advantages: advantage
 Strategic and economic business  Unfulfilled goals
solution that allows companies to  Poor service
concentrate on core competencies  Increased risk
 Organizations improve their cash
position and reduce expenses by
selling assets to an outsourcer
 Access to greater expertise and
better technology
 Lower costs by standardizing user
applications, buying hardware at
bulk prices, splitting development
and maintenance costs between
projects, and operating at higher
volumes
 Less development time.
 Elimination of peaks-and-valleys
 Facilitates downsizing

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 Methods to Develop an AIS
Business Process Redesign
Prototyping
Computer-Aided Software Engineering
(CASE) Tools

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 Business Process Redesign
Drastic, one-time-event approach to
improving and automating business
processes
Low success rate
Evolved into:
Business Process Management (BPM)
 Systematic approach to continuously improving and
optimizing an organization’s business processes

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50
 Prototyping

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 Prototyping
Advantages Disadvantages

Better definition of user  Less efficient use of

needs system resources
Higher user involvement 
Inadequate testing
and satisfaction and documentation
Faster development time
Negative behavioral
Fewer errors
reactions
More opportunity for
Never-ending
changes
Less costly
development

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 Computer-Aided Software
Engineering (CASE)
Software to help plan, analyze, design,
program, and maintain an information
system
Strategic planning
Project and system management
Database design
Screen and report layout
Automatic code generation

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53
 CASE Advantages vs.
Disadvantages
Improved Incompatibility
productivity Cost
Improved program Unmet
quality expectations
Cost savings
Improved control
procedures
Simplified
documentation

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 Systems Development Life Cycle
(SDLC)

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 Conceptual Design
Developer creates a
general framework for
implementing user
requirements and
solving the problems
identified in the
analysis phase.
Evaluating design
alternatives
Preparing design
specifications
Preparing the
conceptual systems
design report

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 Preparing Design
Specifications
 Output
 How often?
 What should reports contain?
 What should reports look like?
 Should reports be online or hard copy or both?
 Data Storage
 What data elements must be stored to produce a report?
 How they should be stored?
 What type of file or database should be used?
 Input
 Where, when, and how to collect the data?
 Processing Procedures and Operations

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 Physical Design
Conceptual designs
are translated into
detailed
specifications that
are used to code
and test the
computer programs.
Output
File and database
Input
Program
Procedures
Controls

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 Output Design
Determine the nature, format, content, and
timing of reports, documents, and screen
displays.
Types of Output:
 Scheduled reports
 Special-purpose analysis reports
 Triggered exception reports
 Demand reports

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 Program Design
1. Determine user needs.
2. Create and document development plan.
3. Write program instructions (code the
system).
4. Test the program (debug for errors).
5. Document the program.
6. Train the users.
7. Install the system.
8. Use and modify the system.

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 Procedures and Controls
 Procedures for who,  Control
what, where, why, considerations:
when: Validity
Input preparation
Authorization
Transaction
Accuracy
processing
Error detection and Security
correction Numerical control
Controls Availability
Reconciliation of Maintainability
balances Integrity
Database access
Output preparation Audit control
and distribution
Computer operator
instructions
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 Implementation and
Conversion
Process of
installing hardware
and software and
getting the AIS up
and running
Planning
Prepare site
Train personnel
Complete
documentation
Test system
Conversion

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 Types of Documentation
Development Documentation
A system description; copies of output, input,
and file and database layouts; program
flowcharts; test results; and user acceptance
forms
Operations Documentation
Includes operating schedules; files and
databases accessed; and equipment, security,
and file-retention requirements
User Documentation
Teaches users how to operate the AIS; it includes
a procedures manual and training materials

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 Types of System Testing
Walk-Through
Step-by-step reviews of procedures or program
logic to find incorrect logic, errors, omissions,
or other problems
Processing Test Data
Using both valid transactions and all possible
error conditions
Acceptance Tests
Real transactions and files rather than
hypothetical ones, users develop the
acceptance criteria and make the final decision
whether to accept the AIS
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 Types of Conversions
Direct
Terminates the old AIS when the new one is
introduced
Parallel
Operates the old and new systems simultaneously
for a period
Phase-in
Gradually replaces elements of the old AIS with the
new one
Pilot
Implements a system in one part of the
organization, such as a branch location
Localizes conversion problems and allows training
in a live environment
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 Operations and Maintenance
Post-Implementation Review
Determines whether the system meets its
planned objectives

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