DEVELOPMENT

STRATEGIES

CHAPTER 5

1
TOPIC OUTLINE:

DEVELOPMENT
STRATEGIES

2
 INTRODUCTION
• The main objective of systems analysis
phase is to build a logical model of the new
information system as described in Topic 3
& Topic 4.
• This topic describes the remaining activities
in the systems analysis phase such as
– the transition to systems design
– prototyping
– systems design guidelines

3
DEVELOPMENT STRATEGIES
OVERVIEW

• Selecting the best development path is an important

decision that requires companies to consider 3 key
issues
– The impact of the Internet
– Software outsourcing options
– In-house software development alternative

4
THE IMPACT OF THE
INTERNET
 Internet has triggered enormous changes
in business methods and operations.

 Software as service …
◦ Replace package applications
◦ Remove the responsibility of installation,
maintenance and upgrades

 Developers will focus on Web-based

application development, which builds the
Web into the application.
◦ Example:- IBM’s WebSphere; Microsoft’s .NET

5
TRADITIONAL DEVELOPMENT VS. WEB
BASED

• Traditional Development • Web Based Development

– System design is influenced by – Systems are developed and delivered
compatibility issues (hardware in an Internet-based framework
& software)
– Treats the Web as the platform,
– Systems are designed to run on rather than just a communication
local and wide-area company channel
networks
– Easily scalable & run on multiple
– Utilize internet links as hardware environment
enhancement
– Treats software application as a
service
– Scalability affected by
telecommunications limitation
& network constraints – Web-based software usually requires
additional layers, called middleware
– Less security issue
6
OUTSOURCING
• Outsourcing - a company that contracts with
another company to provide services, saves cost
• 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

7
 OUTSOURCING
 Softwa
re outsourcin
◦ Outsourcin g options
g is the tran
operation, o sfer of IS de
r maintenan velopment,
provides the ce to an ou
se services, f tside firm th
long-term ba o r a fee, on a at
sis. t e mporary or

◦ Traditiona
lly …
 as a wa
y of controllin
technologica g costs and d
l change ealing with ra
pid

◦ Today …
 vital bu
siness issue
that shapes a
company’s o
verall IT strat
egy
8
 OUTSOURCE
 Softwa
re outsourc
◦ A firm th in g options
at offers ou
provider (e ts o u
ither specifi rcing solutions is call
s o f t w ar e s o c applicatio ed a servic
lution) n or enterp e
rise wide
 Applic
ation servic
e providers
 A firm (ASP)
t ha
td
application elivers a software app
, by chargin li
g a usage o cation, or access to a
r subscriptio n
 Intern n fee
et business
services (IB
 Servic S) (hosting
es which p )
such as ord rovide p
er processin owerful Web-based s
m a n a g em e g, billing, a up
nt . nd custome port for transactions
r relationsh
ip

9
OUTSOURCE
 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

◦ A usage model or transaction model charges a

variable fee based on the volume of transactions or
operations

 Outsourcing Issues and Concerns

◦ If the cost is attractive, reliable and the business
solution that fits the business strategy.
◦ Maintain security (data)
◦ Avoid lost revenue
◦ Other issue (licensing, ownership, warranty)
10
OUTSOURCING
 Offshore @ Global Outsourcing

– Shifting IT development, support & operations to other countries

– Offshore outsourcing – global outsourcing
– Many firms are sending IT work overseas at an increasing rate
– The main reason for offshore outsourcing is the same as
domestic outsourcing: lower bottom-line costs
– Offshore outsourcing, however, involves some unique risks and
concerns

11
 IN-HOUSE DEVELOPMENT
 OPTION
Make or Buy Decision
◦ The choice between developing versus purchasing
software often is called a make or buy, or build or buy
decision
 Make
◦ The company’s IT department makes, builds, and
develops in-house software
 Buy
◦ A software package is obtained from a vendor or
application service provider.
 The most important consideration is total cost of ownership
(TCO)
◦ A number used in assessing costs, which includes
ongoing support and maintenance costs, as well as
acquisition costs

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 Software Package
 Software that is purchased or leased from another
firm.
 Is obtained from a software vendor.

 Software Vendor
◦ Companies that develop software for sale.

13
IN-HOUSE
DEVELOPMENT

Reasons for in-house software development:

◦ 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

14
IN-HOUSE
DEVELOPMENT
 Reasons for purchasing a Software Package:

◦ Lower costs
◦ Requires less time to implement
◦ Proven reliability and performance benchmarks
◦ Requires less technical development staff
◦ Future upgrades provided by the vendor
◦ Input from other companies

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IN-HOUSE DEVELOPMENT
OPTION
• Creating User Applications
– User application
– User interface
– Help desk or information center
(IC)
– Screen generators
– Report generators
– Read-only properties

16
IN-HOUSE DEVELOPMENT
OPTION
• Customizing a Software Package
1. You can purchase a basic package that vendors will
customize to suit your needs
2. 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

17
IN-HOUSE DEVELOPMENT
•OPTION
Customizing Software Package
– Purchase basic package that vendors will customize to suit your
needs.
– Negotiate with the vendor to make enhancement
– Make your own modification with permission under the terms of
software license

• Creating User Application

– Utilizes standard software. Eg Ms Word, Excel etc

18
MAKE OR BUY DECISION

FIGURE 7-8 Instead of outsourcing, a company can choose to

develop a system in-house, or purchase and possibly customize
a commercial package
19
ROLE OF THE SYSTEMS
ANALYST
 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

 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
20
◦ Software licensing options
 ANALYZING COST &
BENEFITS
• Financial Analysis Tools :
• Payback Analysis
• Return On Investment (ROI)
• Net Present Value (NPV)

• Cost Benefit Analysis Checklist:

• List each development strategy
• Identify all cost and benefits
• Consider future growth & scalability
• Support cost for hardware & software
• Licensing option, fees
• Apply financial analysis tools to each alternative
• Study the result & prepare a report to management

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A 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
 Prepare a request for proposal or quotation

◦ Evaluate the Information System Requirements

 Request for proposal (RFP)
 a written list of features and specifications given to
prospective vendors before a specific product or
package has been selected.
 Request for quotation (RFQ)
 is used to obtain a price quotation or bid

22
A SOFTWARE ACQUISITION
PROCESS
• Step 2:
– Identify Potential Vendors or Outsourcing Options
• To work with a consulting firm
• Another resource is the Internet bulletin board systems
that contains thousands of forums, called newsgroups

• Step 3:
– Evaluate the Alternatives
• Existing users (contact users to obtain feedback)
• Application testing
• Benchmarks
– measures the time a package takes to process a certain
number of transactions.

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A SOFTWARE ACQUISITION
PROCESS
• 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 maintenance
agreement

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A SOFTWARE ACQUISITION
PROCESS
• Step 5:
– Prepare a Recommendation
• You should prepare a recommendation that contains
your recommendation and lists the alternatives,
together with the costs, benefits, advantages, and
disadvantages of each option

• Step 6:
– Implement the Solution
• 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
 System Requirements Document contains …
◦ the requirements for the new system,
◦ describes the alternatives that were considered,
◦ a specific recommendation to management
– Like a contract
– Format and organize it so it is easy to read and use

 System analyst come out with a logical design

…
◦ what’s the output & input, its function, features &
relationship among all the components
◦ what is to be accomplish by the system.

 System Design Guidelines / physical design …

◦ which is planned for the actual development (based
on the logical design) 26
COMPLETION OF SYSTEMS ANALYSIS
TASKS

• Presentation to Management
– Summarize the primary viable alternatives
– 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

27
SYSTEM DESIGN
GUIDELINES

• Preparing for Systems Design Tasks

– It is essential to have an accurate and
understandable system requirements
document
• 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 28
SYSTEMS DESIGN
GUIDELINES
• Overview
– A system is effective if it supports business requirements and
meets user needs
– A system is reliable if it handles input errors, processing
errors, hardware failures, or human mistakes
– A system is maintainable if it is flexible, scalable, and easily
modified

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30
31
SYSTEMS DESIGN
GUIDELINES
• 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

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PROTOTYPING
 Prototyping Methods
◦ System prototyping
 System prototyping produces a full-featured, working model of
the information system

 Design prototyping
 Prototyping of user requirements, after which the prototype is
discarded and implementation continues. Also called
throwaway prototyping

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PROTOTYPING

 Advantages & Disadvantages

◦ Prototyping offers many benefits
 Users and systems developers can avoid
misunderstandings
 Managers can evaluate a working model more effectively
than a paper specification

◦ Also consider potential problems

 The rapid pace of development can create quality
problems
 In very complex systems, the prototype becomes
unwieldy and difficult to manage

35
PROTOTYPING

• Prototyping Tools
– CASE tools
– Application generators
– Report generators
– Screen generators
– Fourth-generation languages (4GLs)

36
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

37
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

38
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

39