CHAPTER 5: SYSTEMS DEVELOPMENT AND PROGRAM

CHANGE ACTIVITIES
PARTCIPANTS IN THE SDLC:

Systems Professionals- individuals who build the system (systems analysts, systems
engineers, and programmers)
End Users- for whom the system is built (These include managers, operations personnel,
accountants, and internal auditors)
Stakeholders- individuals either within or outside the organization who have an interest
in the system but are not end users
Accountants/Auditors- The SDLC process is of interest to accountants and auditors for
two reasons. First, the creation of an information system involve significant financial
transactions. Accountants are as concerned with the integrity of this process as they are
with any manufacturing process that has financial resource implications. The second
reason is that the accountants responsibility is to ensure that the systems employ proper
accounting conventions and rules, and possess adequate controls.

INFORMATION SYSTEMS ACQUISITION

1. IN-HOUSE DEVELOPMENT
Firms design and build their own information systems, customized
2. COMMERCIAL SYTEMS
Firms purchase from software vendors
TYPES OF COMMERCIAL SYSTEMS
Turnkey systems. Completely finished systems and ready for installation, limited
ability for customization
General Accounting Systems. Serves a wide variety of user needs, standardized
systems typically sold in separate modules (e.g., accounts payable, accounts
receivable, inventory control, etc.)
Special Purpose Systems. Standardized systems that deal with industry-specific
procedures. (e.g., accounting systems for the medical field, banking industry)
Office Automation Systems. Improve the productivity of office workers (dbms,
spreadsheet programs)
Backbone Systems. provide a basic system structure on which to build.
Vendor Supported Systems. Hybrid custom and commercial systems, software
vendor develops and maintains custom systems for clients.
ADVANTAGES OF COMMERCIAL SOFTWARE
Immediate implementation than custom systems
Cost is reduced
Reliability. commercial software is less likely to have errors than an equivalent
in-house system.
DISADVANTAGES OF COMMERCIAL SOFTWARE

 Independence. Firms are dependent on vendors for maintenance, greatest

disadvantage
Commercial software are not customized according to the needs of the firm
Commercial software may be difficult to change or modify
THE SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC)
SYSTEMS PLANNING-PHASE 1
Link individual system projects or applications to the strategic objectives of the
firm
Basis is the organizations business plan.
Where the firm wants to go and how to get there
1. Strategic Systems Planning. Allocation of systems resources at the macro level.
Process is similar to budgeting resources for strategic activities. Technically not a
part of the SDLC.
2. Project Planning. Basic purpose is to allocate scarce resources to specific projects.
The product of this phase consists of two formal documents: the project proposal and
the project schedule.
Project Proposal. basis for deciding whether to proceed with the project
(1. Recommend new or modified system. 2. shows that the proposed new system
complements the strategic direction of the firm)
Project Schedule. a budget of the time and costs for all the phases of the SDLC
SYSTEMS ANALYSIS-PHASE 2
Foundation for the rest of the SDLC
Systems analysis report is the end result of the systems analysis phase. It presents
the survey findings, the problems identified with the current system, the users
needs, and the requirements of the new system.
Systems analysis involves 2 steps:
1. System Survey. Analyst gathers and analyzes relevant facts and use these to assess
the current system.
Fact-gathering techniques:
Observation
Task participation
Personal interviews
Reviewing key documents
2. Analysis Step. Systems analysis is an intellectual process that is commingled with
fact gathering. The analyst is simultaneously analyzing as he or she gathers facts. It is
therefore difficult to identify where the survey ends and the analysis begins.
CONCEPTUAL SYSTEMS DESIGN-PHASE 3
Produce several alternatives that satisfy system requirements
APPROACHES TO CONCEPTUAL SYSTEMS DESIGN
1. Structured Design. Designing systems from top-down. Usually documented
by data flow and structured diagrams.

2. Object oriented approach. Build information systems from reusable

standard components or objects.
SYSTEM EVALUATION AND SELECTION-PHASE 4
optimization process that seeks to identify the best system from the alternatives or
choices presented in phase 3
The deliverable product of the systems selection process is the systems selection
report.
involves 2 steps:
1. Perform a detailed feasibility study
T- technical feasibility. whether the system can be developed under existing technology
or if new technology is needed
E- economic feasibility. Availability of funds
L- legal feasibility. The decision maker must be certain the proposed system falls inside
all legal boundaries.
O-operational feasibility. degree of compatibility between the firms existing procedures
and personnel skills and the operational requirements of the new system
S- schedule feasibility- firms ability to implement the project within an acceptable time
2. Perform a cost-benefit analysis
DETAILED DESIGN-PHASE 5
produce a detailed description of the proposed system that both satisfies the
system requirements identified during systems analysis and is in accordance with
the conceptual design
after the detailed design, perform system design walkthrough to ensure that the
design is free from conceptual errors that could become programmed into the final
system
APPLICATION PROGRAMMING AND TESTING-PHASE 6
select a programming language from among the various languages available that
is suitable to the application
A procedural language requires the programmer to specify the precise order in
which the program logic is executed. Procedural languages are often called
third-generation languages
Event-driven languages are no longer procedural. Under this model, the
programs code is not executed in a predefined sequence. Instead, external
actions or events that are initiated by the user dictate the control flow of the
program
Object-Oriented Languages. Central to achieving the benefits of the object
oriented approach is developing software in an object-oriented programming
(OOP) language.
Programming the System. Regardless of the programming language used,
modern programs should follow a modular approach. This technique produces
small programs that perform narrowly defined tasks

SYSTEM IMPLEMENTATION-PHASE 7
Database structures are populated with data, New system is installed, system is
documented
The systems documentation provides the auditor with essential information
about how the system works:
Designer and Programmer Documentation. Systems designers and
programmers need documentation to debug errors and perform
maintenance on the system
Operator Documentation. Computer operators use documentation called
a run manual, which describes how to run the system.
User Documentation. documentation describing how to use the system
(user handbook).
Cutover. process of converting from the old system to the new. It will usually
follow one of three approaches: cold turkey, phased, or parallel operation.
Cold Turkey Cutover. Under the cold turkey cutover approach (also
called the Big Bang approach), the firm switches to the new system and
simultaneously terminates the old system.
Phased Cutover. Sometimes an entire system cannot, or need not, be cut
over at once.
Parallel operation cutover involves running the old system and the new
system simultaneously for a period of time

SYSTEMS MAINTENANCE-PHASE 8
Systems maintenance is a formal process by which application programs undergo
changes to accommodate changes in user needs.