Introduction to system analysis and design

System analysis and design is a series of processes for analysing and designing computer-
based information systems. Systems design allows a development team to roughly see what
and how their system will look like. An important result of systems analysis and design is
application software, that is, software designed to support a specific organizational function
or process.

Companies often commit significant resources to development, acquisition and continued

maintenance of application systems. These systems often control an organization’s assets
and may in themselves be considered an asset that needs to be protected and controlled.

One or more of the following situations will initiate an individual application or project:

a) A new opportunity that relates to a new or existing business process.

b) A problem that relates to an actual business process.
c) A new opportunity that will enable the organization to take advantage of
technology.
d) A problem with the current technology.
e) Organizational growth
f) Merger or acquisition
g) Revisions in government regulations

System development projects should be initiated using well-defined procedures to

communicate business needs to management. These procedures often require detailed
documentation identifying the need or problem, specifying the desired solution and relating
the potential benefits to the organization.

Aids in system analysis and design include:

 Methodologies – Comprehensive, multi-step approaches to systems development

that guides the work and influences the quality of the final product.

 Techniques – Particular processes that an analyst will follow to ensure that the work
is well thought-out, complete and comprehensible to others on the project team.

 Tools – Computer programs that make it easy to use and benefit from the techniques
and to faithfully follow the guidelines of the overall development methodology.
System analysts use the system analysis and design process to develop new systems. They
study the organization’s present systems and suggest actions to be taken after doing
preliminary investigations.
Different approaches to system development are:
1. System Development Life Cycle (SDLC)
2. Structured Systems Analysis Design Methodology (SSADM) – Data driven methodology
3. Prototyping Method – User driven method
4. Rapid Application Development (RAD)

System Development Life Cycle

This is also known as traditional system development method or function driven method or
process driven method. The method requires the analyst to follow a sequence of phases
during the development and implementation of an information system. This involves people
and is described as information system development project. The following are the system
development cycle phases or stages:

1. Preliminary survey/study
2. Feasibility study
3. Facts finding and recording
4. Analysis
5. System design
6. System development
7. System implementation
Preliminary study

This stage involves determination of whether there is need to change the existing system or
business procedures. It may require management requests for a change of the existing
system to give an organization a competitive advantage or to improve the staff morale. The
user department should be involved during the definition of the problem. The problem to be
solved should be very specific, clear and precise. It should not be too broad to cause
ambiguities in its solution.

Objectives of the preliminary study are:

 To understand organizational characteristics and its objectives
 To understand organizational structure
 To identify organizational mission and collect relevant data or document regarding
organizational information.
 To develop a brief and accurate problems statement usually known as system term of
reference (TOR).

Terms of reference
It is a documentation prepared by steering committee to act as a reference document
throughout system development stages. Its contents include:

 Project title
 Subject of study
 Purpose of study
 Personnel
 Departments
 Sections affected or involved during the system implementation
 Available resources and constraints, the analyst, the project leader should consider
 The projects estimated duration and schedule

The importance of terms of reference is:

i. Provides information about the proposed system

ii. It may act as a reference document throughout the system development process
iii. It acts as an authorization document to the project development team by the
management
iv. It gives the scope and extent of the proposed system project, thus setting out
systems limitation and capability
v. It sets out the objectives of the proposed system

Steering committee
It is formed by two or three people to oversee the system development project from its
initiation to its completion. It comprises of the system analyst as the project leader and a
representative of the user department. They should understand all the processing objectives
and procedures within the affected department. A management representative and
accountant or auditors may be incorporated to advise initially on financial aspects on the
project.

The functions of the steering committee are:

a) To study the current processing procedures that may require to be improved.

b) To prepare problem statement in form of terms of reference.
c) To coordinate system development activities throughout the development life
cycle.
d) To interface the project development team with organizational management.
e) To resolve conflict that may arise during system development.
f) To direct, control and monitor the system development progress.

3.2 Feasibility study

This is a more detailed study carried out by a feasibility study team. Its purpose is to define
the problem and decide whether or not a new system to replace the existing one is viable or
feasible. During the study, the analyst should assess the magnitude of the problem and
attempt to restrict or at least identify the scope of the project. The analyst must list precisely
the problems of the current system and also indicate what would be required of the new
system. He must identify alternative solutions to the problems and recommend the most cost
effective solution.

Feasibility study activities include:

 Identification of main characteristics of the existing system

 Determination of the main output requirements
 Considerations of alternative ways of meeting similar requirements.
 Preparation of gross estimates of developments, implementation and operation costs
for each probable alternative solution.
 Documentation of the study i.e. writing of feasibility study report.
 Preparation of gross estimates of possible direct and indirect benefits for each
probable alternative.

The following are the areas of feasibility study:

a) Technical Feasibility
b) Social Feasibility
c) Economical Feasibility
d) Legal Feasibility

Technical Feasibility
Technical questions are those that deal with equipment and software e.g. determination of
whether the new system can be developed using the current computer facilities within the
company. Technical feasibility is thus aimed at evaluation of the following:

i. The hardware required for the new system

ii. The software required for the new system
iii. Determination of whether the current facilities are adequate or inadequate for the
new system after implementation.
iv. Evaluation of the current technology and how applicable it is to the new system
v. Determination of the need for telecommunication equipment in the new system to
improve both data capture and preparation activities.
vi. The inputs, outputs, files and procedures that the proposed system should have as
compared to the outputs, files and procedures for the current system.
vii. Determination of whether training is necessary for the employees before the new
system is implemented and the relevant skills required.
viii. Suggesting a suitable method of developing the new system, methods of running it
when it becomes operational and ways of implementing it.

Social Feasibility
This is also known as operational feasibility. It mostly deals with the effect of the system on
the current society within the company. It is carried out on the following areas:

i. The reaction of individuals both inside and outside the company as a result of the
new system.
ii. The effect of the system on the existing organizational structure.
iii. The effect of the system on the current working practices and management levels
i.e. whether there would be any change required and if so the cost of the change
socially.
iv. Redundancy or retrenchment, implication to the company as a result of the new
system.
v. Implication of the system on existing staff development programmes.

The social feasibility is carried out along with technical feasibility such that the social
implications of every alternative technical solution to the problem that emerges are
evaluated. Areas to consider include:
  Group relationships
 Salary levels
 Job titles and job descriptions
 Social costs to be evaluated e.g. cost of user training, consultancy that may be
engaged during development of the new system, job improvements and salary
changes.

Legal Feasibility
The new systems legal implications should be evaluated e.g. if it requires that the computer
should be insured or whether the stored data should be registered with the government
registrar before use. The copyright implication for restriction should be assessed before the
new system is implemented. Generally any legal aspects associated with the new system
should be assessed, and adequate measures taken to protect the interest of the user
company.

Economic Feasibility
Economic feasibility is aimed at determination of whether or not to continue with the project,
depending on whether the project is economically viable. The systems benefits and
estimated implementation cost should be determined before any further resources can be
spent on the project.
A cost benefit analysis (CBA) is carried out to determine whether the new system is
economically viable.

Cost Benefit Analysis

Benefit Analysis: Is obtained through comparison of the new system and the existing
system. Benefits of the new system fall under two categories i.e. direct and indirect benefits
as well as tangible and intangible benefits.

i. Direct (Tangible)–fall under two categories: measurable benefits and direct savings.

Measurable benefits are those that can be quantified in monetary terms e.g. increase in
working capital as a result of purchasing of computer systems or reduction of delays in
decision making which is obtained through improved procedures e.g. invoicing procedures
and credit control procedures.

Direct savings are those costs, reduced or eliminated as a result of introduction of

computerized system. They include reduction or elimination of clerical personnel and
elimination of some specific costs e.g. stationery costs. Like measurable benefits direct
savings can be quantified in monetary terms.

ii. Intangible benefits – they are benefits that cannot be quantified in monetary terms or
those that are difficult or impossible to quantify in monetary terms.
They are clearly desirable but very difficult to evaluate in terms of money value e.g.
improved customer satisfaction, better information, improved organizational image,
increased staff morale, a competitive advantage to an organization etc.

Cost Analysis: Costs are expenses or expenditure which are incurred by a system. These
may include equipment cost, development cost, operation cost and software cost. During
cost analysis one should consider both the new and the existing system. The cost of retaining
and operating the existing system should be compared to the cost of introducing and running
the computerized information system.

These costs fall under the following categories:

a) The cost of running the existing system. This is calculated from the past records. The
items to consider include:

i. Man power cost – which is extracted from the budgets and payroll reports
ii. Material cost – which includes consumables e.g. stationery, work in progress and
current stock
 iii. Operational cost e.g. the equipment cost expressed in terms of unit rate. Others to
consider include the duration the project takes to be completed and initial
replacement cost.
iv. Overhead costs – which are direct expenses incurred by the company on behalf of
all departments e.g. rent, electricity, telephone bill etc. These can easily be
extracted from departments or centres to which they are allocated.
v. The intangible cost of existing system e.g. loss of sales or cost of sales as a result
of inappropriate stock levels or loss of interest in bank as a result of improper credit
control system.

b) The cost of operating the proposed system – this is likely to include all the areas covered
above i.e. manpower, materials, overheads and the intangible costs. However there are
additional costs associated with computerized systems e.g. service contracts for the
computer system, insurance of the computer system, cost of data transmission, cost of
consumables like printer cartridges, ribbons etc. All these costs should be evaluated or
estimated as accurately as possible.

c) The cost of new system development – Includes the cost incurred for any consultancy
services that may have been hired during development. Allowances given to the system
development team members fall under this category. Overall effects of the system
development and implementation should be determined and any cost associated
established. These estimates are based on both time and activities involved in the project.
Staff training cost, recruitment costs and retrenchment costs should be considered under
system development cost.

Cost benefit analysis should be conducted on each alternative solution to the problem. This
enables the analyst to make recommendation on a suitable cost effective alternative solution
to the problem.

Cost benefit analysis techniques

The techniques used in economical evaluation of a computer based information system are
the same used in investment appraisal in other areas of commercial world. These techniques
tend to produce contradictory results and none of them is universally accepted. These
techniques are based on either marginal costing methods or life cycle costing method.
Marginal costing methods deal with snapshots of systems performance at a given point in
time. Life cycle costing methods deal with measuring system performance over its working
life.

These techniques include:

 The ARR (Accounting Rate of Return)
 Pay Back Period
 Discounted Cash flow – Net Present Value (NPV)
 Internal rate of Return (IRR)

Some of the limitations of CBA are:

 Difficult to consider all factors that might contribute costs or benefits
 Difficult to quantify some costs and benefits.

Feasibility study report

After the feasibility study and the cost benefit appraisal, a report is prepared that gives
recommendations on whether or not to commit any further resources on the project.
The contents of the feasibility study report include:
 Introduction – It gives general description of the existing system, the people contacted
during the study and purpose of the report.
 Description of the alternative proposed systems in terms of the inputs, outputs, file
processed, response time etc.
 Quantification to justify the cost of running the proposed system
 The recommendation by the analyst on the most cost effective alternative solution.
  The author of the report
 System analyst recommendations on the new system indicating whether to commit
further resources.
 If the decision is to continue with the project, its development plan should be given.

The report is submitted to the management for approval. After approval a more detailed
survey is conducted on the existing system mostly to establish its weaknesses and strengths.

Fact finding/investigation

This involves collection of information about the existing system on which to base analysis in
order to determine whether users current needs are being met. The following are some of the
activities that are looked at:

a) Functional requirement – the requirements should be established

b) Determination of the proposed system requirements – this is necessary as it may
suggest a change in the existing system requirement.
c) Establish any weaknesses or problems associated with the present system, working
methods and procedures.
d) Determination of organizational growth rate – this will assist in determination of the
growth of the volume of transactions to be processed.
e) Determination of the organization structure, objective and the cost associated with the
present system.

Fact-finding comprises of the following activities:

i. Fact-gathering
ii. Fact-recording
iii. Fact-evaluation

Fact-finding techniques
a) Use of questionnaires

A questionnaire is a special document that allows the analyst to ask a number of standard
questions set to be asked to a large number of people in order to gather information from
them. It is used when:
- the system analyst is located at a considerably long distance from the
respondent
- there is a large number of respondents such that interviewing them will be
limited by time
- the questions to be asked are simple and straight forward and require direct
answers
- limited information is required from a large number of people
- it is used as a means to verify facts found using other methods.

Advantages of using questionnaires are:

 They provide a cheap means of gathering information/data from a large number of
people.
 They encourage individuals to provide response without fear, intimidation or
victimization.
 The respondents can complete the questionnaire at their own convenience with
minimal or limited interruption of their work.
 Questions are presented consistently to all without bias.

Disadvantages of using questionnaires are:

 Response is often too slow since the respondents complete and return the form at
their own convenience.
 They don’t provide an opportunity for respondents to obtain clarification of questions
which may appear vague or ambiguous.
 Does not provide an opportunity for the analyst to observe respondents’ reactions.
  The design of the questionnaire requires an expert who may charge expensively and
may not be economical when used for a small group of users.
 All forms may not be returned and also not all questions may be answered which leads
to incomplete data for analysis.

Requirements for preparing a questionnaire include:

 Questions should be simple and clear.
 The questions should be objectively oriented and one should avoid leading questions.
 The questions should be logically organized.
 The form should be neat.

b) Interviewing
This is a direct face-to-face conversation between the system analyst (the interviewer) and
users (interviewees). He obtains answers to questions he asks the interviewee. He gets the
interviewee’s suggestions and recommendations that may assist during the design of the
proposed system.
Interviews serve the following purposes:
 Acts as a method of fact-finding to gather facts about the existing system.
 Used for verifying facts gathered through other methods.
 Used for clarifying facts gathered through other methods.
 Used to get the user involved in the development of the new system.

Interviews are used in the following circumstances:

 When the respondents are few e.g. corporate managers
 When the respondents are physically available and accessible
 When the main emphasis of the system investigation is people
 When the analyst wishes to seek direct answers, opinions, suggestions and detailed
information
 When the analyst wishes to verify validity of facts collected through other techniques
 When immediate response is required

Interviews have the following advantages:

 The analyst can frame questions differently to individuals depending on their level of
understanding. Thus it allows detailed facts to be gathered.
 The analyst can observe non-verbal communication from the respondents or
interviewees
 The response rate tends to be high
 Provides immediate response
 The analyst can get detailed facts from each respondent
Disadvantages of interviews are:
 Costly and time consuming when used on a large number of people
 Success highly depends on the analyst human relation skills, expertise and experience
 May not be practical due to location of respondent
 May make the respondents to feel that they are being summoned or grilled by analyst
 Interviews can fail due to:
o Ambiguous questions being asked
o Personal questions being asked
o Inadequate time allocation for the exercise
o Lack of earlier preparation by both parties
o When the analyst is biased on using technical jargon
c) Observation
Observation is the most effective fact-finding technique but requires the analyst to
participate in performing some activities carried out by the user. He may choose to watch
them as they perform their activities and gather the facts intended.

This method is best used in the following circumstances:

  When the validity of facts gathered through other methods is questionable
 When complexity of certain aspects of a system prevent a clear explanation by the
respondents or the user
 Used to confirm that the procedures specified in the manuals are being followed.
 When one needs to obtain first hand and reliable information

Guidelines when using the observation method include:

 There should be permission from concerned authorities before the exercise
 Gathered facts should be recorded
 Those to be observed should be notified and the purpose of the exercise explained
 The analyst should be objective and avoid personal opinion. He should have an open
mind
 The analyst should also record ordinary events

Advantages of observation method include:

 Data gathered is highly reliable thus the method can be used to verify facts collected
through other methods
 The analyst can see what is being done clearly including the tasks which are difficult to
explain clearly in writing or in words
 Inaccuracy or inaccurately described tasks can easily be identified
 It allows the analyst to easily compare gathered facts through other methods and what
actually happened on the ground
 Relatively cheap compared to other methods

Disadvantages of observation are:

 People feel uncomfortable when being observed and behave abnormally thus influence
the analyst’s conclusions
 The exercise may take place at odd times thus inconveniencing those involved
 The analyst may observe exceptional activities, leaving some critical areas. His
patience and expertise play a great role
 The tasks being observed may be interrupted and the analyst may gather wrong facts

d) Record inspection/Document review

This method involves perusing through literature or documents to gain a better

understanding about the existing system. Examples of documents that are perused include
sales orders, job descriptions, existing systems documentation, management reports,
procedure manuals, organized structure charts, trade journals etc.
This method is best used when:
 The analyst needs to have a quick overview of the existing system
 The information required cannot be obtained through any other techniques

Advantages of this method are:

 It is comparatively cheap compared to other techniques
 It is a faster method of fact finding especially when documents to be considered are
few
Disadvantages of this method are:
 Time consuming if the documents are many or if they are not within the same locality
 Unavailability of relevant documents makes this method unreliable
 Its success depends on the expertise of the analyst
 Most of the documents or information obtained may be outdated

e) Sampling

Sampling is the systematic selection of representative elements of a population. The selected

elements are examined closely and the results assumed to reveal useful information about
the entire population.

This method is used when the target population:

 Is too large and it is impractical to study every element of the population
 Contains homogenous elements (elements with similar characteristics)

Advantages of sampling are:

 It reduces the cost e.g. by avoiding to examine every document or talking to everyone
in the organization to gather facts
 It speeds up fact finding process
 It improves effectiveness since one can concentrate on few people and fewer
documents and get adequate accurate information
 May reduce biasness, if a representative sample is taken. All the elements of the
population stand a chance of being selected.

Disadvantages include:
 The sample may not be representative enough which may lead to incorrect and bias
conclusions
 The expertise of the analyst is required since sampling involves a lot of mathematical
computation

Analysis
A system analysis involves evaluation of the current system using the gathered facts or
information. One should evaluate whether the current and projected user needs are being
met. If not, he should give a recommendation of what is to be done. Analysis involves
detailed assessment of the components of the existing system and the requirements of the
system.

The objectives or aims of system analysis are:

 To determine information needs of an organization and the users of that information
 Determination of the current activities of the system i.e. functions involved in
conversion of inputs to outputs
 Determination of the intended systems output
 Determination of the resources required for the intended system
 Determine capabilities required in the system to meet information needs of the
organization

System analysis activities are:

i) Analysis of the organization environment. The analyst should evaluate in details
information needs of the organization environment e.g. information needs of the
consumers, suppliers, competitors, government departments etc.
ii) Analysis of the present system. The analyst should study the current system and
identify its weaknesses and its strengths. He should establish the ability of current
system in meeting the stated information needs. This guides a decision to be made
on whether the existing system stands to be improved, changed or done away with
altogether. Some aspects of the existing system that are examined includes input
transactions, outputs or results, existing controls, files, user interaction, methods,
procedures, functions and existing hardware and software.
 iii) Requirement analysis – involves determination of user requirements e.g. task
performed, output expected, proposed system development cycle and user goals.
The following are also determined:

 Maximum, minimum and average levels of activities

 Duplicate procedures e.g. two people entering the same transaction at different
times
 Labour intensive tasks – the tasks that are manual and can easily be
computerized
 Activities or tasks that involve complex or repetitive computation
 Procedures that have become obsolete

Once all the facts are analysed and documented a formal report is written called statement
of requirements.

The contents of statement of requirements are:

i) Description of the initial system goals and whether or not they are met and are still
applicable
ii) Description of whether the existing system is cost effective
iii) Description of whether the output produced is adequate, timely and well controlled
iv) Description of whether files held are suitable for supporting current organization
requirements
v) Description of current system inputs and whether or not they support current file
maintenance activities
vi) Description of the existing system workflow efficiency
vii) Description of any constraints within the system
viii) Description of any existing system equipment, procedures and controls that can be
transferred to the new system.

The importance of system analysis are:

 It helps the analyst or system developer to gain understanding of the existing
system.
 It allows the analyst or system developer to record existing system information
in a standard form to aid design of a new system. It also facilitates
understanding of the system by the user staff.
 Enables the analyst or developer to define existing system procedure into a
logical model
 Helps the analyst to write or produce statement of requirements, which guides
the development team throughout subsequent stages of the development life
cycle.