UNIT -3 NOTES BDMS

Basis of System Planning

1. Information is a very important resource and must be

managed .
2. As computer systems are becoming integral part of
Business operations management is paying more
attention to their development.
3. There is a growing need for formal long range planning
with information system which use common database
and have greater competitive advantage.
 System Planning
Today, the demands for a new or enhancement of the system exceeds the ability and resources of
most organizations to conduct system development projects. System planning is the first phase in
the system development life cycle. System planning is where an organization’s total information
needs are identified, analyzed, prioritized and arranged. Organization creates and assesses the
original goals and expectation of a new system. There are reasons why the organization need to
develop a new or improved system; for example is to add value to the organization.

Planning phase starts with reviewing the request towards system development. Figure 2-1 shows
two major activities involved in system planning:

i. identifying the system development project

ii. planning the system development project

 IDENTIFYING THE SYSTEM DEVELOPMENT PROJECT

There are two ways on how to identify the needs for system
development either by top-down planning and bottom-up planning.
Top-down planning is where the top management asks the IT support
or unit within their organization to develop a system. They will identify
and assesses if there is any possible system development projects
organization can be done. Bottom-up planning is also known as a user
request planning. User’s request is when users need the system in
order to fulfill or help their daily job easily.
 IDENTIFYING THE SYSTEM DEVELOPMENT PROJECT

The starting point of information system project is called a system

service request. A project is identified when someone in the
organization identifies that they need to build a systems for a certain
needs. System service request is a formal way of asking for IT support.
A system service request might propose enhancements for an existing
system, the correction of problems or errors, or the development of
entirely new information system.
· Improved services offered

This is the most basic reason why we need a new or enhanced system. A new or enhanced system is important
to improve services for customers or users within the organization. Allowing students to register subjects online,
driving license renewal via web-based are example on how organization used a system to increase their
customer satisfaction.

· Support for new products or new services

New product developed or new services introduced require new types of IT support. For example, changing the
use of punch card to fingerprint recognition in staff attendance is an example of installation of new products that
needs a new system development project.

· Provide more information

The system might produce information which is not enough in order to support the organization’s changing
information needs. For example, lecturer can obtain students results, but he/she can’t generate a report to
analyze student performance.
 PLANNING THE SYSTEM DEVELOPMENT PROJECT

Some other methodologies refer it as preliminary investigation phase, initial study

phase, or planning phase. Systems analysts always conduct a preliminary
investigation to study the system service request and recommend the specific
action base on that. This activity is important to initiate the project. After getting the
approval from the management, the analysts interact with the stakeholders involved
such as system owner, project managers and system user to gather information.

The analyst responsibility is to gather the information about the problems or

opportunity, project scope and constraints, project benefits, and budget for
development time and costs. Then, analyst will prepare a report to the
management.
 PLANNING THE SYSTEM DEVELOPMENT PROJECT

A proper plan of system development is important to make sure that the

system is within the scope, within the budget, and finish at the specific
time. Usually, Gantt chart will be used to represent all the activities
involved during the system development.

Gantt charts are useful for planning and scheduling projects. They
help you assess how long a project should take, determine the
resources needed, and plan the order in which you'll complete tasks.
They're also helpful for managing the dependencies between tasks.
 PLANNING THE SYSTEM DEVELOPMENT PROJECT

Some other methodologies refer it as preliminary investigation phase, initial study

phase, or planning phase.

Systems analysts always conduct a preliminary investigation to study the system

service request and recommend the specific action base on that.

This activity is important to initiate the project. After getting the approval from the
management, the analysts interact with the stakeholders involved such as system
owner, project managers and system user to gather information.
Sampling of existing documentation, forms and
databases
The best way to analyze the existing system is to collect facts from existing
documentation rather than from human sources. There are various kinds of
documents to collect facts from existing documents.
These include:
● e-mails, customer complaints, suggestion box notes and reports that
document the problem area
● problem performance reviews, samples of completed manual forms and
reports and samples of completed computerized forms and reports
● various types of flowcharts and diagrams, program documentation and user
training manuals
 Fact Finding Techniques

 Sampling of existing documentation, forms and

databases
 Research and Site visits
 Questionnaires-Free Format and Fixed Format
 Interviews-Structured and Unstructured
 Research and Site visits

● Research and site visits, second technique, is the process of

examining the problems which had previously solved by
other sources that can be either human or documents.
● To solve the requirements of problem, the analyst visits to
other organization that had previously experienced for
similar problems. In addition, the analyst can also find the
information from database, reference books, case studies
and Internet.
 Questionnaires

● Questionnaires are also one of useful fact-finding technique to collect

information from large number of users. Users fill up the questions which
are given by the system analyst and then give the answers back to the
system analyst.
● Questionnaires can save time because system analyst does not need to
interview each of users and if the time of interview is short,
questionnaires are more useful. To fulfil the requirements of the system
objective, system analyst should have the ability to clearly define the
design and frame of questionnaires.
 Two types of questionnaires:
● 1. Free-format questionnaires
● In free-format questionnaires, users are allowed to answer questions freely
without immediate response. The results are also useful in learning about
feelings, opinions, and experiences of the respondents.
● 2. Fixed-format questionnaires
● The purpose of fixed-format questionnaires is to gather information from
predefined format of questions. Users are allowed to choose the result from the
given answers. There are three types of fixed-format questions: multiple-choice
questions (Yes or No type), rating questions (Strongly agree, Agree, No opinion,
Disagree, Strongly disagree), ranking questions (numbering according to the
preferences).
 Interviews
● Interview is the most commonly used technique to collect
information from the face-to-face interviews. The purpose of
interview is to find, verify, clarify facts, motivate end-users
involved, identify requirements and gather ideas and
opinions. The role of interview includes interviewer who is
system analyst and interviewee who are system owner or
user. Interviewing technique needs good communication
skills for interaction between system analyst and user.
Two types of interviews.

● 1. Unstructured interviews
● An interview that is conducted with only a general goal or subject in
mind and with few, if any, specific questions (Bentley, Whitten, 2007).
Open-ended questions type is used in unstructured interview that
allows user to answer freely in an appropriate way.
● 2. Structured interviews
● Structured interview is an interview which contains predefined set of
questions. In structured interview, close-ended questions type is used
to limit answers to specify choices, short and direct responses from the
interviewees.
Analyst Responsibility

The analyst responsibility is to gathers the information about the problems or

opportunity, project scope and constraints, project benefits, and budget for
development time and costs.

1. Scope and Constraints

2. Understanding the problem or opportunity

3. Estimate project development time and cost

Scope and Constraints
● Determining the project scope means defining the specific boundaries of the
project. It’s important to define the project scope because it will limit the project
development scope. Scope are the boundaries of a project – the areas of a
business that a project may (or may not) address.

● Along with the project scope, system analyst needs to identify if there is any
possible constraints on the system. A constraint is a requirement or condition
that the system must satisfy or an outcome that the system must achieve. A
constraint can be derived from hardware, software, time, organization policy
and others.
 Understanding the problem or opportunity
● From the system service request, we’ll know either the project is a new
information system development or upgrading the current information system.
The important task in this step is establishing an initial problems, opportunities
and directives that triggered the project.

● The team needs to learn about the current system. System owner, system
analyst and system user have a different level of understanding from the system.
After learning the entire system, the project team will sit together to analyze the
problem and opportunities arise. During this session, project team ask the
system owner and system users several type of questions to gain more
understanding to leads to possible new system. They analyzed the problems
based on cause-and-effect analysis.
Estimate project development time and cost

● If the project is worthy to continue, we can now plan the project in more detail.
This activities involved estimate the cost of money needed to run the project
development. The team also plans a project schedule to make sure that they
do the task in time and finish the project within the time given.

● Gantt Chart and Pert Diagram is an example of techniques that can be used
to represent the project schedule with the direction of tasks, and time needed
to complete the task and others.
 Feasibility study
A system request presents a brief summary of a business need,
and it explains how a system that supports the need will create
business value.The IS department works together with the
person or department generating the request (called the project
sponsor) to conduct a feasibility analysis. The feasibility analysis
examines key aspects of the proposed project:

■ The technical feasibility (Can we build it?)

■ The economic feasibility (Will it provide business value?)
■ The organizational feasibility (If we build it, will it be used?)
 Feasibility study
● Feasibility Study can be considered as preliminary
investigation that helps the management to take
decision about whether study of system should be
feasible for development or not.
● It is an analysis that considers all of a project's
relevant factors—including economic, technical, legal,
and scheduling considerations—to ascertain the
likelihood of completing the project successfully.
What Is a Feasibility Study Example?

As an example, let's say that a major hospital in the city is looking to

expand its campus by adding a building. The project managers and
hospital administrators carry out a feasibility study to determine the
project's cost, including labor and materials for the building's
construction.

The study included an analysis of the potential need, the expected

number of patients, projected revenues, and operating costs, such as
staff, doctors, and nurses. The project managers explored how to
finance the project through a combination of financing from local
financial institutions and donations from wealthy investors.
Types of feasibility study –

● Operational Feasablity
● Technical Feasablity
● Economic Feasablity
● Legal Feasablity
● Schedule Feasablity
Operational Feasibility

It is mainly related to human organizational and political

aspects.The points to be considered are. System
Planning

⮚ What changes will be brought with the system.

⮚ What new skills will be required?
⮚ Do the existing staff members have these skills? If not,
can they be trained in due course of time?
Technical Feasibility
This is concerned with specifying equipment and software that will
successfully satisfy the user requirement.Points to consider in this are-
● configuration of the system
● How many workstations are required,
● how these units are interconnected so that they could operate and
communicate smoothly.
● The purpose of assessing technical feasibility is to gain an understanding
of the organization’s ability to construct and implement the proposed system.
This feasibility assesses the details of how we will deliver a product or service
for example; materials, labor, transportation, where your business will be
located, technology needed, and others.
Economic Feasibility

● Economic analysis is most frequently used technique for evaluating the

effectiveness of a proposed system. More commonly known as cost benefit
analysis. The procedure is to determine the benefits and savings that are
expected from a proposed system and compare them with costs.

● If benefits outweigh costs, a decision is taken to design and implement the

system, otherwise further justification or alternative in the proposed system
will have to be made if it is to have a chance of being approved. This is an
ongoing effort that improves in accuracy at each phase of the system life
cycle.
 Legal Feasibility
● Legal feasibility studies issues arising out of the need to the development of the
system. The possible consideration might include copyright law, labour law,
antitrust legislation, foreign trade, regulation, etc. Contractual obligation
● System Planning may include the number of users who will be able to use the
software. There may be multiple user’s licences, single user licences, etc. Legal
feasibility plays a major role in formulating contracts between vendors and users.
If the ownership of the code is not given to the user, it will be difficult to install it
without proper permission to other systems.
● Another important legal aspect is that whenever an IT company and the user
company do not belong to the same country then the tax laws, foreign currency
transfer regulations, etc., have to be taken care of.
Schedule Feasibility is defined as the probability of a project to be
completed within its scheduled time limits, by a planned due date. If a
project has a high probability to be completed on-time, then its schedule
feasibility is appraised as high. In many cases a project will be
unsuccessful if it takes longer than it was estimated: some external
environmental conditions may change, hence a project can lose its
benefits, expediency and profitability. If a work to be accomplished at a
project does not fit the timeframes demanded by its customers, then a
schedule is unfeasible (amount of work should be reduced or other
schedule compression methods applied).
 Cost Benefit Analysis

● A cost-benefit analysis is the process of comparing the projected or

estimated costs and benefits (or opportunities) associated with a project
decision to determine whether it makes sense from a business
perspective.

● Generally speaking, cost-benefit analysis involves tallying up all costs of

a project or decision and subtracting that amount from the total projected
benefits of the project or decision.
 Costs Involved

● 1. Cost of human resources It includes the salaries of system analysts,

software engineers, programmers, data entry operators, operational, and
clerical staff. In other words, the amount that is going to be spent on all
the people involved.
● 2. Cost of infrastructure The cost of infrastructure including those of
computers, cables, software, etc., comes under this head.
● 3. Cost of training Both the developing staff and operating staff need to
be trained for new technologies and new system. So, the training cost
has to be considered for calculating the cost of the system.
 There is a difference between expenditure and
investment. We spend to get what we need,
but we invest to realize a return on the
investment. Building a computer – based system is
an investment. Costs are incurred throughout its
life cycle. Benefits are realized in the form of
reduced operating costs, improved corporate
image, staff efficiency, or revenues. To what
extent benefits outweigh costs is the function of
cost /benefit analysis.
 a procedure that gives a picture of the various
costs, benefits and rules associated with a
system.
 Tangibility refers to the ease with which
costs or benefits can be measured.
 The purchase of hardware or software,
personnel training and employee salaries are
examples of tangible costs. They are readily
identified and measured.
 Costs that are known to exist but whose
financial value cannot be accurately
measured are referred to as intangible costs.
 For example, employee morale problems
caused by a new system or lowered company
image is an intangible cost. In some cases,
intangible costs may be easy to identify but
difficult to measure. For example, the cost of
the breakdown of an online system during
banking hours will cause the bank to lose
deposits and waste human resources.
 Benefits are also classified as tangible or
intangible. Like costs, they are often difficult to
specify accurately. Tangible benefits, such as
completing jobs in fewer hours or producing
reports with no errors, are quantifiable.
Intangible benefits, such as more satisfied
customers or an improved corporate image,
are not easily quantified. Both tangible and
intangible costs and benefits, however, should be
considered in the evaluation process.
 1. From a project team and appoint a project leader.
 2. Prepare system flowcharts.
 3. Enumerate potential candidate systems.
 4. Describe and identify characteristics of candidate
systems.
 5. Determine and evaluate performance and cost
effectiveness of each candidate
 system.
 6. Weight system performance and cost data.
 7. Select the best candidate system.
 8. Prepare and report final project directive to
management.
 Feasibility Report
● evaluates the impact of the proposed changes on the areas in
question
● The report is a formal document for management use, brief enough
and sufficiently nontechnical to be understandable, yet detailed
enough to provide the basis for system design.
● There is no standard format for preparing feasibility reports.
Analysts usually decide on a format that suits the particular user and
system.
● Most reports, however, begin with a summary of findings and
recommendations, followed by documented details. Starting with
summary information high- lights the essence of the report, giving
management the option of reviewing the details later.
 Report Contents
1. Cover letter formally presents the report and briefly
indicates to management the nature, general findings, and
recommendations to be considered.
2. Table of contents specifies the location of the various
parts of the report. Management quickly refers to the
sections that concern them.
3. Overview is a narrative explanation of the purpose and
scope of the project, the reason for undertaking the
feasibility study, and the department(s) involved or
affected by the candidate system. Also included are the
names of the persons who conducted the study, when it
began, and other information that explains the
circumstances surrounding the study.
 Report Contents
4. Detailed findings outline the methods used in the
present system system's effectiveness and efficiency as
well as operating costs are emphasized. The section
also provides a description of the objectives and
general procedures of the candidate system. A
discussion of output reports, costs, and benefits gives
management a feel for the pros and cons of the
candidate system
 Report Contents
5. Economic justification details point-by-point cost
comparisons and preliminary cost estimates for the
development and operation of the candidate system.
6. Recommendations and conclusions suggest to
management the most beneficial and cost-effective
system. They are written only as a recommendation,
not a command. Following the recommendations, any
conclusions from the study may be included.
 Report Contents
7. Appendixes document all memos and data compiled
during the investigation. They are placed at the end of the
report for reference.

Disapproval of the feasibility report is rare if it has been

conducted properly. When a feasibility team has maintained
good rapport with the user and his/her staff it makes the
recommendations easier to approve. Technically, the report is
only a recommendation, but it is an authoritative one.
Management has the final say. Its approval is required before
system design is initiated
 Oral Presentation
The most critical requirements for the analyst who gives
the oral presentation are
(1) communication skills and knowledge about the
candidate system that can be translated into language
understandable to the user, and
(2) the ability to answer questions, clarify issues,
maintain credibility, and pick up on any new ideas or
suggestions.
 Aim of Oral Presentation
1. Informing
2. Confirming
3. Persuading