1. Chapter 6 Home Page – Welcome! To navigate the slide presentation, use the navigation bar on the left OR use your right and left arrow keys. Move your mouse over the key terms throughout the presentation to see a definition. Click to view reference figures. For further exploration, links to selected web sites are included. Click under this banner throughout the presentation.

2. 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. 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. 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. 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. 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

7. 7 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

8. 8 The Impact of the Internet  Software as a Service – Software as a Service (SaaS) 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 systemsSoftware and Information Industry Association (SIIA) Figure 6-2 Figure 6-3 Figure 6-4

9. 9 The Impact of the Internet  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

10. 10 The Impact of the Internet  Traditional vs. Web-Based Systems Development – Two major Web-based development environments are IBM’s WebSphere and Microsoft’s.NETWebSphere.NET – Although there is a major trend toward Web- based systems, many firms rely on traditional systems Figure 6-5

11. 11 The Impact of the Internet  Traditional vs. Web-Based Systems Development – 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

12. 12 The Impact of the Internet  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 middlewaremiddleware

13. 13 Outsourcing  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 functionbusiness process outsourcingBPO Figure 6-6 For more information about Outsourcing, visit scsite.com/sad7e/more, scsite.com/sad7e/more locate Chapter 6 and then the Outsourcing link.

14. 14 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

15. 15 Outsourcing  The Growth of Outsourcing – A firm that offers outsourcing solutions is called a service providerservice provider – Application service providers (ASP) Application service providers (ASP) – Internet business services (IBS) Internet business services (IBS) Also called managed hostingmanaged hosting Figure 6-8 For more information about Application Service Providers, visit scsite.com/sad7e/more,scsite.com/sad7e/more locate Chapter 6 and then the Application Service Providers link.

16. 16 Outsourcing  Outsourcing Fees – A fixed fee model uses a set fee based on a specified level of service and user supportfixed fee model – A subscription model has a variable fee based on the number of users or workstations that have access to the applicationsubscription model – A usage model or transaction model charges a variable fee based on the volume of transactions or operations performed by the applicationusage model transaction model

17. 17 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

18. 18 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

19. 19 Outsourcing  Offshore Outsourcing – Offshore outsourcing – global outsourcing Offshore outsourcingglobal 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

20. 20 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

21. 21 In-House Software Development Options  Make or Buy Decision – The choice between developing versus purchasing software often is called a make or buy, or build or buy decisionmake or buybuild or buy – The company’s IT department makes, builds, and develops in-house softwarein-house software – A software package is obtained from a vendor or application service provider.software package

22. 22 In-House Software Development Options  Make or Buy Decision – Companies that develop software for sale are called software vendorssoftware vendors – Value-added reseller (VAR) Value-added reseller (VAR) – Horizontal application Horizontal application – Vertical application Vertical application Figure 6-11 Figure 6-12 For more information about Value-Added Reseller, visit scsite.com/sad7e/more, scsite.com/sad7e/more locate Chapter 6 and then the Value-Added Reseller link.

23. 23 In-House Software Development Options  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

24. 24 In-House Software Development Options  Purchasing a Software Package – Lower costs – Requires less time to implement – Proven reliability and performance benchmarks

25. 25 In-House Software Development Options  Purchasing a Software Package – Requires less technical development staff – Future upgrades provided by the vendor – Input from other companies

26. 26 In-House Software Development Options  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 Figure 6-13

27. 27 In-House Software Development Options  Creating User Applications – User application User application – User interface User interface – Help desk or information center (IC) Help desk information center (IC) – Screen generators Screen generators – Report generators Report generators – Read-only properties Read-only properties Figure 6-14

28. 28 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 teamevaluation and selection team

29. 29 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

30. 30 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

31. 31 Analyzing Cost and Benefits  Financial Analysis Tools – Payback Analysis Payback Analysis – Return on investment (ROI) Return on investment (ROI) – Net present value (NPV) Net present value (NPV) For more information about Financial Analysis Tools, visit scsite.com/sad7e/more, scsite.com/sad7e/more locate Chapter 6 and then the Financial Analysis Tools link.

32. 32 Analyzing Cost and Benefits  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

33. 33 Analyzing Cost and Benefits  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

34. 34 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

35. 35 The Software Acquisition Process  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

36. 36 The Software Acquisition Process  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 newsgroupsnewsgroups Figure 6-22

37. 37 The Software Acquisition Process  Step 3: Evaluate the Alternatives – Existing users – Application testing – Benchmarking - benchmarkbenchmark – Match each package against the RFP features and rank the choices Figure 6-23 For more information about Benchmark Tests, visit scsite.com/sad7e/more, scsite.com/sad7e/more locate Chapter 6 and then the Benchmark Tests link. Figure 6-24

38. 38 The 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 licensesoftware license – If you purchase a software package, consider a supplemental maintenance agreementmaintenance agreement

39. 39 The Software Acquisition Process  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

40. 40 The Software Acquisition Process  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

41. 41 Completion of Systems Analysis Tasks  To complete the systems analysis phase, you must prepare the system requirements document and your presentation to management

42. 42 Completion of Systems Analysis Tasks  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 managementsystem requirements document software requirements specification – Like a contract – Format and organize it so it is easy to read and use

43. 43 Completion of Systems Analysis Tasks  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

44. 44 Completion of Systems Analysis Tasks  Presentation to Management – 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

45. 45 Completion of Systems Analysis Tasks  Presentation to Management – Depending on their decision, your next task will be one of the following 1.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

46. 46 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

47. 47 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 componentslogical design – The physical design of an information system is a plan for the actual implementation of the systemphysical design

48. 48 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

49. 49 Systems Design Guidelines  System Design Objectives – The goal of systems design is to build a system that is effective, reliable, and maintainablesystems design – 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

50. 50 Systems Design Guidelines  System Design Objectives – 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-codedhard-coded Provide flexibility Parameter, defaultParameterdefault Figure 6-26

51. 51 Systems Design Guidelines  System Design Objectives – 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

52. 52 Systems Design Guidelines  System Design Objectives – Data Considerations Access for data entry should be controlled and all entries or changes to critical data values should be reported – audit trailaudit trail Every instance of entry and change to data should be logged

53. 53 Systems Design Guidelines  System Design Objectives – Data Considerations Data should be entered into a system only once Data duplication should be avoided

54. 54 Systems Design Guidelines  System Design Objectives – Architecture considerations Use a modular design Design modules that perform a single function are easier to understand, implement, and maintain

55. 55 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

56. 56 Prototyping  Prototyping produces an early, rapidly constructed working version of the proposed information system, called a prototype Prototypingprototype  Prototyping allows users to examine a model that accurately represents system outputs, inputs, interfaces, and processes Figure 6-28

57. 57 Prototyping  Prototyping Methods – System prototyping System prototyping – Design prototyping Design prototyping – Throwaway prototyping Throwaway prototyping Figure 6-29 Figure 6-30

58. 58 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

59. 59 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

60. 60 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

61. 61 Future Trends in Software Development  Many software development tools and technologies are in transition – Web services Web services – Open source software – Development platforms will see continued growth For more information about Future Software Development Trends, visit scsite.com/sad7e/more,scsite.com/sad7e/more locate Chapter 6 and then the Future Software Development Trends link.

62. 62 Future Trends in Software Development  Many software development tools and technologies are in transition – Service-oriented architecture (SOA) Service-oriented architecture (SOA) Loose coupling – Software quality is more important than ever

63. 63 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

64. 64 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

65. 65 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

66. 66 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

67. 67 Test Yourself 2.True/False: A software package that is developed for a specific type of business is called a vertical application.

68. 68 Test Yourself 2.True/False: A software package that is developed for a specific type of business is called a vertical application. True

69. 69 Test Yourself 3.Name three options for obtaining a proposed information system.

70. 70 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

71. 71 Test Yourself 4.True/False: A company that delivers applications by charging a usage fee is called an Internet business service.

72. 72 Test Yourself 4.True/False: A company that delivers applications by charging a usage fee is called an Internet business service. False

73. 73 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 purchase Evaluate requirements Install the package Identify vendors Evaluate software alternatives

74. 74 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 requirements 2.Identify vendors 3.Evaluate software alternatives 4.Make the purchase 5.Install the package

75. 75 Test Yourself 6.Match the step in the left column to the correct action or term to the right. 1. Evaluate requirements 2. Identify potential vendors 3. Evaluate alternatives 4. Make the purchase 5. Install package a. Benchmark b. Consider lease or maintenance agreement c. RFP/RFQ d. Convert data files to new format e. Research vendors

76. 76 Test Yourself 6.Match the step in the left column to the correct action or term to the right. 1. Evaluate requirements: c. RFP/RFQ 2. Identify potential vendors: e. Research vendors 3. Evaluate alternatives: a. Benchmark 4. Make the purchase: b. Lease/maint. agreements 5. Install package: d. Convert data to new format

77. 77 Test Yourself 7.Why is the systems requirements document a key management milestone?

78. 78 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

79. 79 Test Yourself 8.True/False: A prototype is an early version of the system that will transition, unchanged, to the final design.

80. 80 Test Yourself 8.True/False: A prototype is an early version of the system that will transition, unchanged, to the final design. False

81. 81 Test Yourself 9.Using modular design is an example of which type of systems design consideration: user, data, processing?

82. 82 Test Yourself 9.Using modular design is an example of which type of systems design consideration: processing?

83. 83 Test Yourself 10. Another name for offshore outsourcing is ____________.

84. 84 Test Yourself 10. Another name for offshore outsourcing is global outsourcing.

85. Systems Analysis & Design 7 th Edition End Chapter 6