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2

Chapter Objectives

Describe software trends, including the concept of software as a service

Explain software acquisition alternatives, including traditional and Web-based software development strategies

Describe software outsourcing options, including offshore outsourcing and the role of service providers

3

Chapter Objectives

Explain advantages and disadvantages of in-house software development

Explain cost-benefit analysis and financial analysis tools

Explain the differences between a request for proposal (RFP) and a request for quotation (RFQ)

4

Chapter Objectives

Describe the system requirements document Explain the transition from systems analysis

to systems design, and the importance of prototyping

Discuss guidelines for system design Describe future software development trends

5

Introduction

Chapter 6 describes the remaining activities in the systems analysis phase

The chapter also describes the transition to systems design, prototyping, and systems design guidelines

The chapter concludes with a discussion of future trends in software development

6

Development Strategies Overview

Selecting the best development path is an important decision that requires companies to consider three key topics

– The impact of the Internet

– Software outsourcing options

– In-house software development alternatives

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The Impact of the Internet

The Internet has triggered enormous changes in business methods and operations, and software acquisition is no exception

This section examines a trend that views software as a service, the changing market-place for software, and how Web-based development compares to traditional methods

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Software as a Service

– Software as a Service (SaaS)

– The Software and Information Industry Association (SIIA) believes that the concept of software as a service is redefining the way that companies develop and deploy their information systems

Figure 6-2 Figure 6-3

Figure 6-4

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Traditional vs. Web-Based Systems Development

– As a systems analyst, you must consider whether development will take place in a Web-centric framework, or in a traditional environment

– In an Internet-based system, the Web becomes an integral part of the application, rather than just a communication channel

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– Two major Web-based development environments are IBM’s WebSphere and Microsoft’s .NET

– Although there is a major trend toward Web-based systems, many firms rely on traditional systems

Figure 6-5

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– Traditional development• System design is influenced by compatibility issues

• Systems are designed to run on local and wide-area company networks

• Web-based features are treated as enhancements rather than core elements of the design

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Traditional vs. Web-Based Systems Development– Web-based development

• Systems are developed and delivered in an Internet-based framework such as .NET or WebSphere

• Internet-based development treats the Web as the platform, rather than just a communication channel

• Web-based software usually requires additional layers, called middleware

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Outsourcing

Outsourcing Can refer to relatively minor programming

tasks, the rental of software from a service provider, the outsourcing of a basic business process (often called business process outsourcing, or BPO), or the handling of a company’s entire IT function

Figure 6-6For more information aboutOutsourcing, visit scsite.com/sad7e/more, locate Chapter 6 and then the Outsourcing link.

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Outsourcing

The Growth of Outsourcing

– Traditionally, firms outsourced IT tasks as a way of controlling costs and dealing with rapid technological change

– Outsourcing has become part of an overall IT strategy for many organizations

Figure 6-7

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Outsourcing

The Growth of Outsourcing

– A firm that offers outsourcing solutions is called a service provider

– Application service providers (ASP)

– Internet business services (IBS)• Also called managed hosting

Figure 6-8For more information aboutApplication Service Providers, visit scsite.com/sad7e/more, locate Chapter 6 and then the Application Service Providers link.

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Outsourcing

Outsourcing Fees– A fixed fee model uses a set fee based on a

specified level of service and user support– A subscription model has a variable fee based

on the number of users or workstations that have access to the application

– A usage model or transaction model charges a variable fee based on the volume of transactions or operations performed by the application

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Outsourcing

Outsourcing Issues and Concerns

– Mission-critical IT systems should be out-sourced only if the result is a cost-attractive, reliable, business solution that fits the company’s long-term business strategy

– Outsourcing also can affect day-to-day company operations and can raise some concerns

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Outsourcing

Outsourcing Issues and Concerns– A company must review carefully issues

relating to insurance, potential liability, licensing and information ownership, warranties, and disaster recovery

– Mergers and acquisitions also can affect outsourcing clients

– Outsourcing can be especially attractive to a company whose volume fluctuates widely, such as a defense contractor

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Outsourcing

Offshore Outsourcing– Offshore outsourcing – global outsourcing– Many firms are sending IT work overseas at

an increasing rate– Gartner accurately forecast the enormous

growth of offshore outsourcing, and predicted that outsourcing would evolve from labor-intensive maintenance and support to higher level systems development and software design

Figure 6-9

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In-House Software Development Options

A company can choose to develop its own systems, or purchase, possibly customize, and implement a software package

The most important consideration is total cost of ownership (TCO)

Companies also develop user applications designed around commercial software packages

Figure 6-10

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Make or Buy Decision

– The choice between developing versus purchasing software often is called a make or buy, or build or buy decision

– The company’s IT department makes, builds, and develops in-house software

– A software package is obtained from a vendor or application service provider.

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Make or Buy Decision

– Companies that develop software for sale are called software vendors

– Value-added reseller (VAR)

– Horizontal application

– Vertical application

Figure 6-11

Figure 6-12

For more information aboutValue-Added Reseller, visit scsite.com/sad7e/more, locate Chapter 6 and then the Value-Added Reseller link.

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Developing Software In-House

– Satisfy unique business requirements

– Minimize changes in business procedures and policies

– Meet constraints of existing systems

– Meet constraints of existing technology

– Develop internal resources and capabilities

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Purchasing a Software Package

– Lower costs

– Requires less time to implement

– Proven reliability and performance benchmarks

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Purchasing a Software Package

– Requires less technical development staff

– Future upgrades provided by the vendor

– Input from other companies

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Customizing a Software Package1. You can purchase a basic package that

vendors will customize to suit your needs2. You can negotiate directly with the software

vendor to make enhancements to meet your needs by paying for the changes

3. You can purchase the package and make your own modifications, if this is permissible under the terms of the software license

Figure 6-13

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Creating User Applications

– User application

– User interface

– Help desk or information center (IC)

– Screen generators

– Report generators

– Read-only properties

Figure 6-14

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Role of the Systems Analyst

The company must decide whether to use an outsourcing option, develop software in-house, acquire a software package, develop user applications, or select some combination of these solutions

The decision will affect the remaining SDLC phases and your involvement as a systems analyst

When selecting hardware and software, systems analysts often work as an evaluation and selection team

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Role of the Systems Analyst

A team approach ensures that critical factors are not overlooked and that a sound choice is made

The primary objective of the evaluation and selection team is to eliminate system alternatives that will not work, rank the system alternatives that will work, and present the viable alternatives to management for a final decision

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Analyzing Cost and Benefits

Now, at the end of the systems analysis phase of the SDLC, you must apply financial analysis tools and techniques to evaluate development strategies and decide how the project will move forward

Research shows that nearly 80 percent of total IT costs occur after the purchase, and that nearly half of these lie outside the IT department’s budget

Figure 6-15

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Financial Analysis Tools

– Payback Analysis

– Return on investment (ROI)

– Net present value (NPV)

For more information aboutFinancial Analysis Tools, visit scsite.com/sad7e/more, locate Chapter 6 and then the Financial Analysis Tools link.

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Cost-Benefit Analysis Checklist– List each development strategy being

considered– Identify all costs and benefits for each

alternative. Be sure to indicate when costs will be incurred and benefits realized

– Consider future growth and the need for scalability

– Include support costs for hardware and software

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Cost-Benefit Analysis Checklist

– Analyze various software licensing options, including fixed fees and formulas based on the number of users or transactions

– Apply the financial analysis tools to each alternative

– Study the results and prepare a report to management

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The Software Acquisition Process

Step 1: Evaluate the Information System Requirements

– Identify key features

– Consider network and web-related issues

– Estimate volume and future growth

– Specify hardware, software, or personnel constraints

Figure 6-16

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Step 1: Evaluate the Information System Requirements

– Prepare a request for proposal or quotation• Request for proposal (RFP)

• Evaluation model

• Request for quotation (RFQ)

Figure 6-17

Figure 6-18

Figure 6-19

Figure 6-20

Figure 6-21

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Step 2: Identify Potential Vendors or Outsourcing Options

– The Internet is a primary marketplace

– Another approach is to work with a consulting firm

– Another resource is the Internet bulletin board systems that contains thousands of forums, called newsgroups

Figure 6-22

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Step 3: Evaluate the Alternatives

– Existing users

– Application testing

– Benchmarking - benchmark

– Match each package against the RFP features and rank the choices

Figure 6-23

For more information aboutBenchmark Tests, visit scsite.com/sad7e/more, locate Chapter 6 and then the Benchmark Tests link.

Figure 6-24

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Step 4: Perform Cost-Benefit Analysis

– Identify and calculate TCO for each option you are considering

– When you purchase software, what you are buying is a software license

– If you purchase a software package, consider a supplemental maintenance agreement

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Step 5: Prepare a Recommendation

– You should prepare a recommendation that evaluates and describes the alternatives, together with the costs, benefits, advantages, and disadvantages of each option

– At this point, you may be required to submit a formal system requirements document and deliver a presentation

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Step 6: Implement the Solution

– Implementation tasks will depend on the solution selected

– Before the new software becomes operational, you must complete all implementation steps, including loading, configuring, and testing the software; training users; and converting data files to the new system’s format

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Completion of Systems Analysis Tasks

To complete the systems analysis phase, you must prepare the system requirements document and your presentation to management

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System Requirements Document– The system requirements document, or

software requirements specification, contains the requirements for the new system, describes the alternatives that were considered, and makes a specific recommendation to management

– Like a contract– Format and organize it so it is easy to read

and use

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Presentation to Management

– Begin your presentation with a brief overview of the purpose and primary objectives of the system project, the objectives of this presentation, and what decisions need to made

– Summarize the primary viable alternatives. For each alternative, describe the costs, advantages, and disadvantages

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– Explain why the evaluation and selection team chose the recommended alternative

– Allow time for discussion and for questions and answers

– Obtain a final decision from management or agree on a timetable for the next step in the process

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– Depending on their decision, your next task will be one of the following1. Implement an outsourcing alternative

2. Develop an in-house system

3. Purchase or customize a software package

4. Perform additional systems analysis work

5. Stop all further work

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The Transition to System Design

If management decides to develop the system in-house, then the transition to the systems design phase begins

Preparing for Systems Design Tasks

– It is essential to have an accurate and understandable system requirements document

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The Transition to System Design

The Relationship between Logical and Physical Design

– The logical design defines the functions and features of the system and the relationships among its components

– The physical design of an information system is a plan for the actual implementation of the system

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Systems Design Guidelines

The systems analyst must understand the logical design of the system before beginning the physical design of any one component

– Data design

– User interface

– Architecture

– System design specification

Figure 6-25

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System Design Objectives

– The goal of systems design is to build a system that is effective, reliable, and maintainable

– A system is reliable if it adequately handles errors

– A system is maintainable if it is well designed, flexible, and developed with future modifications in mind

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– User Considerations• Carefully consider any point where users receive

output from, or provide input to, the system

• Anticipate future needs of the users, the system, and the organization – hard-coded

• Provide flexibility

• Parameter, default

Figure 6-26

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– Data Considerations• Data should be entered into the system where and

when it occurs because delays cause data errors

• Data should be verified when it is entered, to catch errors immediately

• Automated methods of data entry should be used whenever possible

Figure 6-27

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– Data Considerations• Access for data entry should be controlled and

all entries or changes to critical data values should be reported – audit trail

• Every instance of entry and change to data should be logged

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– Data Considerations• Data should be entered into a system only once

• Data duplication should be avoided

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– Architecture considerations• Use a modular design

• Design modules that perform a single function are easier to understand, implement, and maintain

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Design Trade-Offs

– Design goals often conflict with each other

– Most design trade-off decisions that you will face come down to the basic conflict of quality versus cost

– Avoid decisions that achieve short-term savings but might mean higher costs later

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Prototyping

Prototyping produces an early, rapidly constructed working version of the proposed information system, called a prototype

Prototyping allows users to examine a model that accurately represents system outputs, inputs, interfaces, and processes

Figure 6-28

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Prototyping

Prototyping Methods

– System prototyping

– Design prototyping

– Throwaway prototyping

Figure 6-29

Figure 6-30

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Prototyping

Prototyping Methods– Prototyping offers many benefits

• Users and systems developers can avoid misunderstandings

• Managers can evaluate a working model more effectively than a paper specification

– Consider potential problems• The rapid pace of development can create quality

problems• In very complex systems, the prototype becomes

unwieldy and difficult to manage

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Prototyping

Prototyping Tools

– Systems analysts can use powerful tools to develop prototypes

• CASE tools

• Application generators

• Report generators

• Screen generators

• Fourth-generation language (4GL)

• Fourth-generation environment

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Prototyping

Limitations of Prototypes

– A prototype is a functioning system, but it is less efficient than a fully developed system

– Systems developers can upgrade the prototype into the final information system by adding the necessary capability

– Otherwise, the prototype is discarded

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Future Trends in Software Development

Many software development tools and technologies are in transition

– Web services

– Open source software

– Development platforms will see continued growth

For more information aboutFuture Software Development Trends, visit scsite.com/sad7e/more, locate Chapter 6 and then the Future Software Development Trends link.

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Future Trends in Software Development

Many software development tools and technologies are in transition

– Service-oriented architecture (SOA)• Loose coupling

– Software quality is more important than ever

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Chapter Summary

This chapter describes system development strategies, the preparation and presentation of the system requirements document, and the transition to the systems design phase of the SDLC

An important trend that views software as a service, rather than a product, has created new software acquisition options

Systems analysts must consider Web-based development environments

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Chapter Summary

The systems analyst’s role in the software development process depends on the specific development strategy

The most important factor in choosing a development strategy is total cost of ownership (TCO)

The process of acquiring software involves a series of steps

A prototype is a working model of the proposed system

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Test Yourself

1. Match the development options in the left column with the appropriate advantage.

1. Develop in-house

2. Buy software package

3. Customize

a. Proven reliability and benchmarks.

b. Can modify to suit needs

c. Minimize changes in business procedures

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Test Yourself

1. Match the development options in the left column with the appropriate advantage.

1. Develop in-house

2. Buy software package

3. Customize

a. Proven reliability and benchmarks.

b. Can modify to suit needs

c. Minimize changes in business procedures

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Test Yourself

2. True/False: A software package that is developed for a specific type of business is called a vertical application.

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Test Yourself

2. True/False: A software package that is developed for a specific type of business is called a vertical application.

True

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Test Yourself

3. Name three options for obtaining a proposed information system.

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Test Yourself

3. Name three options for obtaining a proposed information system.

1. Develop in-house

2. Buy a software package

3. Customize a software package

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Test Yourself

4. True/False: A company that delivers applications by charging a usage fee is called an Internet business service.

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Test Yourself

4. True/False: A company that delivers applications by charging a usage fee is called an Internet business service.

False

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Test Yourself

5. After management has decided to buy a software package, a five step process is typically performed by analysts. Arrange the steps shown below in the proper chronological order:

Make the purchaseEvaluate requirementsInstall the packageIdentify vendorsEvaluate software alternatives

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Test Yourself

5. After management has decided to buy a software package, a five step process is typically performed by analysts. Arrange the steps shown below in the proper chronological order:1. Evaluate requirements2. Identify vendors3. Evaluate software alternatives4. Make the purchase5. Install the package

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Test Yourself

6. Match the step in the left column to the correct action or term to the right.

1. Evaluate requirements2. Identify potential vendors3. Evaluate alternatives4. Make the purchase5. Install package

a. Benchmarkb. Consider lease or maintenance agreementc. RFP/RFQd. Convert data files to new formate. Research vendors

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Test Yourself

6. Match the step in the left column to the correct action or term to the right.

1. Evaluate requirements: c. RFP/RFQ2. Identify potential vendors: e. Research vendors3. Evaluate alternatives: a. Benchmark4. Make the purchase: b. Lease/maint. agreements 5. Install package: d. Convert data to new

format

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Test Yourself

7. Why is the systems requirements document a key management milestone?

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Test Yourself

7. Why is the systems requirements document a key management milestone?

It influences the future system development, and may affect decision to:

1. Develop an in-house system

2. Modify the current system

3. Purchase or customize a software package

4. Perform additional systems analysis work

5. Stop all further work

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Test Yourself

8. True/False: A prototype is an early version of the system that will transition, unchanged, to the final design.

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Test Yourself

8. True/False: A prototype is an early version of the system that will transition, unchanged, to the final design.

False

81

Test Yourself

9. Using modular design is an example of which type of systems design consideration: user, data, processing?

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Test Yourself

9. Using modular design is an example of which type of systems design consideration: processing?

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Test Yourself

10. Another name for offshore outsourcing is ____________.

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Test Yourself

10. Another name for offshore outsourcing is global outsourcing.

Systems Analysis & Design

7th Edition

End Chapter 6

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